what is the normal system of recording account receivable in the company?

Answer 1

Section from the procedural manual...we use quickbooks

Cash Receipts

Receiving and Recording Payments
The Receptionist receives payments in the incoming mail and records them in the receipt log. After stamping the check stubs with the date and endorsing as “deposit only” the checks are then forwarded to the Fiscal Director. The Fiscal Director will hold all checks/cash in a locked cabinet until there are sufficient funds or quantity of checks to warrant a deposit. The check stubs are given to the Accounting Assistant to be entered into the QuickBooks system.

The payments received are recorded against the invoices in the system. To apply payments against invoices there are two options. First, from the QuickBooks menu, select [Customers] [Receive Payment]; select the name from the drop down menu titled [Received From] this will bring up all outstanding invoices listed for that vendor. Fill in the [Amount] field with the value on the check. QuickBooks will automatically apply the payment to the oldest invoice available. Select [Un-Apply Payment]. Select the invoices to be paid applying any additional amount to the oldest invoice listed. Select [Save & New] and enter the next payment, when complete continue onto [Banking] [Make Deposits].The second option, which is the preferred option, is to select [Reports] [Customers & Receivables] [A/R Aging Detail]. This option will list all invoices remaining in receivables. Print the Aging Report. Under [Banking] [Make Deposits] enter the deposits using the Aging Detail to match the payments with the invoices. Select the name from the drop-down menu [Received From], the account to be credited from the [Account] menu, select the [Payment Method], [Class], and enter the value of the payment. Finally enter any payments that were not invoiced and print the Deposit Summary. When complete select [Save & Close]. The Summary must then be stapled to the supporting documentation and forwarded to the Fiscal Director.

The Fiscal Director will prepare the manual deposit on the bank’s deposit slip. Checks will be references by their last four digits. When compared, the totals on the manual bank deposit slip and the Deposit Summary must equal. The carbon copy of the bank deposit slip is then attached to the front of the packet containing the deposit summary and the supporting documentation. The Fiscal Director will then take the original deposit slip along with the deposits to the bank. Upon making the deposit the Director will receive a receipt from the teller, this receipt must also be attached to the packet. The packet is then placed in the Accounts Receivables file.

In summary, the Receptionist is responsible for opening, logging and endorsing payments received, the Accounting Assistant enters the payments in the QuickBooks system, and the Fiscal Director makes the physical deposit of the payments.

Answer 2

You use an account's receivable account (which, when you get paid, switches to the cash account), and typically a sales account.

Accounts Receivable $XXXX DR
Sales $XXXX CR

Cash $XXXX DR
Accounts Receivable $XXXX CR