Accounts Receivable (A/R) Questions and Answers
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1 :: What is Evaluated Receipt Settlement?

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.
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2 :: What is total flow of Account Receivables?

Flow of Accounts receivable should be in proportion to Accounts payable i.e. in terms of ration 2:1
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3 :: After Reeving Payment from Customer, What is next step till finalization?

The next step would be adjusting receipt from customer against the customer outstanding with sale and to clear the customer account.
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4 :: How much time needs to pass for an A/R account to be considered delinquent?

After 90 days of the due date.
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6 :: What is effective collection?

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.
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7 :: Explain about Accounts Receivables in Accounting?

It is money receivable from sundry debtors for sales made or services rendered.
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8 :: What are examples of deferred revenue expenditure?

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.
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9 :: Explain what are derivatives?

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.
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10 :: Explain Why is Capital amount put in Liabilities and not in Assets?

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.
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