Question

1. How can we define the term “Receivables” in accounting? How many groups are there related to the receivables of the enterprise in the uniform chart of accounts? Which accounts are under these groups? (For example, there is only one group related to stocks: 15 Stocks) What are the transactions required for the entity's forward receivables? Please explain briefly.

Answer 1

Receivables, likewise refers to as accounts receivable, are debts owed to an organization by its clients for goods or services that have been conveyed or utilized however not yet paid for.Receivables are made by stretching out a line of credit to clients and are accounted for as current assets on an organization's balance sheet. They are viewed as a liquid asset, since they can be utilized as collateral to secure a loan to help meet short term commitments. Receivables are a part of an organization's working capital.

In accounting, a uniform chart of accounts is a numerical list of the accounts that are included in a company’s general ledger. Furthermore, the uniform chart of accounts is generally a filing system for classifying all of a company’s accounts as well as categorising all transactions according to the accounts they affect. The uniform chart of accounts list of groups may include the following:

• Assets
• Liabilities
• Shareholder’s Equity
• Revenues
• Cost of goods sold
• Operating expenses
• Other relevant accounts

The uniform chart of accounts is also named as standard chart of accounts. Try utilizing a chart of accounts format to prepare the basic chart of accounts for any subsidiary companies or related associations.

Forward receivable are also called as forward contract. The transactions required for the entity's forward receivables are the following:-

1. Recognize a forward receivable

2. Recognise a forward contract on the contract date in the balance sheet from the seller’s point of view.

3.Recognise a forward contract on the contract date in the balance sheet from the buyer’s point of view.

4. Record any gain or loss on the commodity sold in the asset account.