Accounts Receivable (Order to Cash or AR) Journal Entries

To record a sale to an account customer
Account	Debit	Credit
Accounts receivable	XXX
Revenue		XXX

To receive a cash payment from an account customer
Account	Debit	Credit
Cash	XXX
Accounts receivable		XXX

To receive a cash payment from an account customer taking cash discount
Account	Debit	Credit
Cash	XXX
Discount allowed	XXX
Accounts receivable		XXX

A credit note is issued to a customer
Account	Debit	Credit
Revenue	XXX
Accounts receivable		XXX

To write off an accounts receivable as a bad debt
Account	Debit	Credit
Bad debt expense	XXX
Accounts receivable		XXX

To set up an allowance for doubtful debts
Account	Debit	Credit
Bad debt expense	XXX
Allowance for doubtful debts		XXX

To use the allowance for doubtful debts to write off an accounts receivable
Account	Debit	Credit
Allowance for doubtful debts	XXX
Accounts receivable		XXX

To record cash received after an accounts receivable has been written off
Account	Debit	Credit
Cash	XXX
Accounts receivable		XXX
Accounts receivable	XXX
Allowance for doubtful debts		XXX

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Intercompany Eliminations with Journal Entries

Intercompany Eliminations Explained intercompany eliminations happen for business combinations. The whole thing kind of confuses me. Can you explain the process and the journal entries to record the intercompany eliminations? Answer: Remember that in a business combination, we are trying to eliminate any transactions between the parent and the subsidiary so that we only have transactions with 3rd parties left after our consolidating entries. So, let’s assume Company A owns Company B and A sells $120,000 of inventory to B. Let’s also assume that Company A gets a 40% margin on all sales and Company B has 30% of the inventory remaining at the end of the year. With this set of facts, they could ask you a wide variety of questions on the CPA exam. One of the tricks to solving problems involving intercompany eliminations is to understand the entries that A and B would book in these cases. One of the other tricks is understanding the relationship between cost and margin percentage.

Procure to Pay (P2P) Process Folow with Journal Entries

Procure to Pay process flow. 1. Requester: Request for goods & the same goes for an approval 2. PR is created & routed for approval 3. Once approved, PO is created. 4. Sourcing activities like, Choosing the right Vendor, Payment info happens meanwhile, 5. PO is routed for approval 6. PO is sent to the supplier.& Vendor signs the agreement (Payment terms) 7. Supplier will send the goods along with Invoice.(PO Number mentioned) 8. Good received & GRN entry is made. 9. Invoice is sent to the AP team 10. AP team process the Invoice (3 way match) - GL coding will be automatically pulled. 11. process for Payment Few Journal Entries examples are as followed. 1. Goods Received Ware House Dr Inventory a/c Cr GRNI a/c 2. Inv. Register in our system Dr RI a/c Cr Trade a/c 3. Receipts Matched/Approved Dr GRNI a/c Cr RI a/c 4. Inv. Pa

End to End Journal Entries for Purchase Orders

Creating end-to-end journal entries for purchase orders involves recording the financial transactions associated with the entire procurement process. Here's a step-by-step breakdown of journal entries related to the purchase order process: 1. Request for Purchase: When a department identifies the need for goods or services and generates a Request for Purchase (RFP) or Purchase Requisition, no financial transactions are recorded at this stage. 2. Vendor Selection and Quotation Comparison: No financial transactions are recorded during the vendor selection or quotation comparison stage. 3. Purchase Order Creation: Once the Purchase Order is created and approved internally, the following journal entry is made: Copy code Debit: Purchase Order Liability Credit: Accounts Payable This entry recognizes the commitment to pay the vendor for the goods or services ordered. 4. Sending the Purchase Order: When the approved Purchase Order is sent to the vendor, there is no financial transacti

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