value owed to and by the business?

Question

Please can somebody tell me what this is, and why it is necessary in accounting?

Thanks x

Answer 1

"Money Owed by" is same as your Credit card bill .. it's what the Company has not yet paid for... in the case of a business it's usually for goods have been delivered to the Company but not yet paid for.

"moneys owed to" is like you lending some cash to your sister .. she 'owes' it 'to you' .. in the case of a business it's usually where goods have been delivered to Customers but they have not yet paid for them.

If you don't know why it's important to know what is owed and what is owing to you, I suggest you take up Art (plainly Business is not for you)