Page 169 - DMGT553_RETAIL_STORE_MANAGEMENT

Retail Store Management

Notes 9. Stock Verification is established to provide an incomplete and discontinuous audit of
stock records, plant, furniture, equipment, allocate and unallocated stock where applicable.
10. The purchasing activities are to be subjected to verification, quantity, quality and price in
order to obtain value for money.

Lab Exercise Go to website http://www.enotes.com/homework-help/what-stock-
verification-relation-spare-parts-84663 and collect information on Perpetual stock
Verification.

9.3 Accounts Receivable

Money owed by customers (individuals or corporations) to another entity in exchange for
goods or services that have been delivered or used, but not yet paid for. Receivables usually
come in the form of operating lines of credit and are usually due within a relatively short time
period, ranging from a few days to a year.
On a public company’s balance sheet, accounts receivable is often recorded as an asset because
this represents a legal obligation for the customer to remit cash for its short-term debts. Money
which is owed to a company by a customer for products and services provided on credit. This is
often treated as a current asset on a balance sheet.

!
Caution A specific sale is generally only treated as an account receivable after the customer
is sent an invoice.
If a company has receivables, this means it has made a sale but has yet to collect the money from
the purchaser. Most companies operate by allowing some portion of their sales to be on credit.
These types of sales are usually made to frequent or special customers who are invoiced
periodically, and allow them to avoid the hassle of physically making payments as each
transaction occurs. In other words, this is when a customer gives a company an IOU for goods or
services already received or rendered.
Accounts receivable are not limited to businesses – individuals have them as well. People get
receivables from their employers in the form of a monthly or bi-weekly pay check. They are
legally owed this money for services (work) already provided. When a company owes debts to
its suppliers or other parties, these are known as accounts payable.

Self Assessment

Fill in the blanks:
11. ................................. usually come in the form of operating lines of credit and are usually
due within a relatively short time period, ranging from a few days to a year.

12. If a company has receivables, this means it has made a sale but has yet to collect the money
from the .................................
13. On a public company’s balance sheet, accounts receivable is often recorded as an asset
because this represents a legal obligation for the customer to remit cash for its ........................
debts.

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