Accounts Receivable and Accounts Payable

 Accounts Receivable  (Debtors) Customers 

When a trader makes a credit sale of goods with the intention of profit, an Accounts Receivable is opened.

 Debtors=The person who owes the business.

Invoice:  It is a document sent by the seller to the buyer to state the amount due on the  

               goods supplied.

Returns Inwards (Sales Returns) : Customer returns goods to the business because they are defective, damaged, of the wrong brand or specification or for some other reason.

Credit note: is a document issued by the seller to the buyer to reduce the amount charged on invoices.

Accounts Payable  (Creditors)Supplier 

When the trader makes a credit purchase of goods with the intention of selling at profit, an Accounts Payable is opened.

Creditors: is the person whom the business owes to.

The trader may return goods to his supplier for similar reasons as above (Defective, damaged......) the Returns Outwards Account / Purchases Returns Account is credited

Homework for S3C.S3B and S2B 

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