Accounting and Finance Questions

A legal strategy that allows a government to grab hold of private property for public use is known as eminent domain. The seizing authority must pay fair market value for the property seized.

The average propensity to consume (APC) is the ratio of consumption expenditures (C) to disposable income (DI), or APC = C / DI. 

Hence, APC = consumption/income.

Paying off your credit card bill most impacts your credit score.

If the price of a product rises, the demand for the substitute product increases.

Accounts receivable is the amount to be received by the seller from the customer. Hence, it comes under asset.

Accounts-receivable financing is a type of asset-financing arrangement in which a company uses its receivables — outstanding invoices or money owed by customers — to receive financing.

when a business sells its AR (accounts receivable) to a factoring company and receives short-term business funding in return, this is what called as Accounts Receivable Financing.

How it works ::

Business-to-business sales are often offered with payment terms of 30, 60 or 90 days.

The buyer receives the product, but doesn't submit payment until the mutually agreed-upon date.

The seller records the sale as revenues and increases the accounts receivable by the amount of the sale.

When the payment arrives, the seller decreases the accounts receivable and increases cash.

Accounts receivable financing allows the seller to get the cash immediately by selling the receivable to a third party. This is called factoring.

Bad debts expense often refers to the loss that a company experiences because it sold goods or provided services and did not require immediate payment. The loss occurs when the customer does not pay the amount owed. In other words, bad debts expense is related to a company's current asset accounts receivable.

You have already recorded the Rs. 100 in your accounts receivable, and you need to eliminate that amount. As you use double-entry accounting, you must record a Rs. 100 credit to your accounts receivable and a Rs. 100 debit to your allowance for doubtful accounts or your bad debts expense column.