Question

What role do customers play in a business? What is sales revenue and how does it relate back to customers? What does “Accounts Receivable” mean? What benefit does the A/R report provide? What are credit memos and are they a good thing? What is a Trial Balance? What does an account reconciliation provide?

Answer 1

What role do customers play in a business? -

Customers are stakeholders for a company. The primary aim of business is to create customer because customers are who drives the growth of company.

What is sales revenue and how does it relate back to customers? -

Sales revenue is the income or revenue received by a company from sales of goods or services.

The company receives money from customers to whom they provide services or supply of goods.

What does “Accounts Receivable” mean? -

Accounts receivable means money that company receives from customers for supply of goods or services on credit. Accounts receivable are given in balance sheet "Assets" side.

What benefit does the A/R report provide? -

An accounts receivable report shows the amount is unpaid and period for which it is outstanding.

What are credit memos and are they a good thing? -

It means it is issued by seller to buyer which reduces amount by that extent. It involves buyer who owes less amount to this extent to seller.

Example- If a buyer has paid the full amount that he owed, they can either use the credit memo to reduce against future invoices or buyer who not paid can only use this credit memo as it reduces amount by that extent.

It is good because it helps buyer to settle amount with seller.

What is a Trial Balance? -

It is list of debit and credit balances which is taken from ledger accounts. In other words, it is list of all balances all are combined.

What does an account reconciliation provide? -

It is process of comparing records to check that figures are correct. This is done to make sure that it is matches with the end of a particular accounting period. The money left matches with actual spend.