How To Calculate Accounts Receivable On Balance Sheet

Here we will study about, “How To Calculate Accounts Receivable On Balance Sheet”?

Accounts Receivable is calculated by preparing Accounts Receivable‘s Ledger in T Account Form or Self-Balancing Form. There is the Opening Balance that is the Previous Accounting Period’s Closing Balance. Credit Sales during the Current Accounting Period is added but Sales Return is deducted. Discount Allowed is deducted from the Beginning Balance of Accounts Receivable / Debtor. Cash Received from customers for goods sold or services rendered by the business is also deducted from the Opening Accounts Receivable Balance.

Accounts Receivable T Account is shown below:

                                      Rs.                                                                    Rs.

Opening Balance b/c   XXX        Sales Return                                     XXX

Sales                            XXX        Cash Received From Customers     XXX

                                                      Balance c/d                                     XXX

We can also use The following Method to calculate Accounts Receivable / Debtor:

                                                                     Rs.

Opening Balance                                        XXX

Add: Credit Sales                                       XXX

Less: Sales Return                                     XXX

Less: Discount Allowed                              XXX

Less: Cash Received From Customers     XXX

  ______________

  Closing Balance                                       XXX

  ______________

This Closing Balance Of Accounts Receivable / Debtor is Transferred To Balance Sheet and from this Closing Balance, the Closing Balance of Allowance For Doubtful Accounts is deducted to find Net Relizable Value of Accounts Receivable / Debtor.