Subject:  Accounts Receivable No.        95-11

Date:    August 31, 1995

- - Modified April 30, 2008

This Important Notice was updated on April 30, 2008 to reflect a change in the receivable object code from 8100 to 8118.

On August 14, 1995, the Accounts Receivable module of the Financial Information System was implemented in Financial Management Support. For contract and grant accounts, all agency invoices are recorded in the system. As payments are received, they are applied to the appropriate invoice and grant account.

Because invoices and payments are being entered into the system, the booking of income, receivables, and cash will change on these accounts. The following will occur:

1. Invoice for $100 is created.

Income 1113 =100 C
Receivable 8118 =100 D
Cash 8000

Result is that income is credited, receivable is created, and cash is not affected.

2. Payment for $50 is received.

Income 1113
Receivable 8118 =50 C
Cash 8000 =50 D

Result is that income is not affected, the receivable is reduced by $50, and cash is increased by $50. At this point, there is an outstanding receivable of $50.

3. Another payment for $50 is received.

Income 1113
Receivable 8118 =50 C
Cash 8000 =50 D

Result is that income is not affected, the receivable is reduced by $50, and cash is increased by $50. At this point, everything is balanced to zero.

The recording of receivables will change how the cash balance is calculated. To figure your cash balance, you must use the following formula: (income - expenditures) + (payables - receivables) = cash balance.

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