ERS is a business process between trading partners that conduct commerce without invoices. In an ERS transaction the supplier ships goods based upon an Advance Shipping Notice (ASN) and the purchaser upon receipt confirms the existence of a corresponding purchase order or contract verifies the identity and quantity of the goods and then pays the supplier.
Flow of Accounts receivable should be in proportion to Accounts payable i.e. in terms of ration 2:1
The next step would be adjusting receipt from customer against the customer outstanding with sale and to clear the customer account.
After 90 days of the due date.
By posting following entry
Customer Deposit A/c Dr (with Remaining amount)
To Cash or Bank A/c (with Remaining amount)
Its depends on the credit period of the company i.e. A company credit period 30 days 85 of the debtors collection should be recovered with in credit period. we can say the Effective collection.
It is money receivable from sundry debtors for sales made or services rendered.
It is an expenditure the benefit of which will be realised over a period and not during the current period.Ex-Heavy Advertisement expenditure incurred by the company for promoting the product.The benefits of this huge expenditure will be realised over the period and not in the same period when it is incurred.
Derivative instrument is an asset which derives ie, takes its origin from another asset.
The simplest form of derivative is a forward contract, "It is an agreement to buy or sell an asset at a certain future time for a certain price"Other forms of of derivatives include futures,options and swaps, etc.
One of the basic convention in accounting is separate legal entity.It means the business is different from those who manage it.When i contribute capital in to my business,it is liability to my business to repay it to me.