In accrual accounting, revenue is recorded when earned, and expenses recorded when incurred. A customer’s obligation to pay for goods and services provided is called accounts receivable. From the firm’s point of view, accounts receivable are assets. When a firm receives goods or services from another business before payment, the firm incurs a liability called accounts payable.
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Peter John Baskerville
onto Basic Accounting Concepts October 28, 2011 5:57 AM
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