Section 4
Accounts Receivable
Book
Version 3
By Boundless
By Boundless
Boundless Finance
Finance
by Boundless
4 concepts
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Defining Accounts Receivable
Accounts receivable represents money owed by entities to the firm on the sale of products or services on credit.
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Setting a Credit Policy
To establish a credit policy, a company must establish credit standards, credit terms, and a collection policy.
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Terms of Trade
Terms of trade credit include the amount of time allowable for payment to be received, including any potential discounts.
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Collecting Receivables
Companies use different methods to collect their outstanding receivables, like sending out reminders or employing a collection agency.