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Exercise
17 Reconciling accounts receivable
Your task In this exercise your task is to look at the your customer's account and work out which invoices your customer has paid when you receive a cheque in the mail for $291.00. This task involves some detective work but it is the kind of detective work that goes on in accounts offices all the time.
Over the last four months, you have received payments from the customer every month. However, there is an outstanding balance of $389.00 (see the customer's statement). You have now received a cheque of $291.00 and this does not match up. So, you need to find out which invoices have been paid and which have not. Once you have identified the invoices unpaid, you should be able to work out what the $291 is for. Along the bottom of the statment you will see a row filled in yellow marked 120 Days, 90 days, 60 days, 30 days and current. This is called Aged Debtor analysis. The purpose is to provide information on how old debts are. If April invoices are "Current" and March invoices are "30 Days", then put respective values in each of the cells in the yellow row. The total debt according to the statement is $389.00, and therefore you should ensure that the sum of boxes in yellow equals $389.00 Your methodIn the credit column of the customer's statement, you will see 5 payments have been made. Try to work out what each of these payments is for. The first payment is $160 and you should notice that the Balance b/fwd (brought forward) on 1 January is also $160.00, and this should help you! The next payment is $242. Which invoices does this payment cover? Everytime you identify which invoices are covered by a particular payment, cross off the invoice and cross off the payment. Then work out the next three payments and work out which invoices are paid. When you have finished, you will have a number of invoices not crossed off, and these are the unpaid invoices. Lastly, you should now be able to work out what the $291 is for. Your Resources Download the Customer's Statement.
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