Question

In: Finance

If, in a regular review of the debtor ledger you identify outstanding monies, what action should...

If, in a regular review of the debtor ledger you identify outstanding monies, what action should you take? 100–120 words

Solutions

Expert Solution

Followings are the action taken for outstanding money in debtor ledger account:

  • All the outstanding money from debtor ledger will be transfer to accounts receivable ledger. It is the customer ledger which lists all the money customers owe to the company.
  • Accounts receivable is the summary of all the outstanding accounts for a period of time which is going to be collected.
  • It records purchase made by each customers and track balances of every account. So that all the outstanding dues can be collected in time.
  • For each credit purchase, there will be separate sub ledger is maintained in accounts receivable. When customers made the payment, posting will be done by debiting cash account and crediting accounts receivable account.
  • Finally the management will reconcile the accounts inorder to match the customers remaining outstanding balance with the aged debtor report. If there is any difference then accountant will check the deferred account, opening balance and sales transactions.

Hence these are the major steps we will take for outstanding money.

All the best for your exam! Thank you!


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