Answer / durga bhavani

the comapny purchase or sells the goods either cash basis
or credit basis. If the comaany purchase the goods on
credit basis the account payable will araise. Account
payable is aliablity . when the company pay that amount it
will be deducted from the account payable account. account
receivable is an asset of the company .if the company sell
the goods on acredit basis to customer the amount will be
transfered to account receivable account .

Answer / immanuel jacob

Accounts payable are amounts a company owes because it
purchased goods or services on credit from a supplier or
vendor. Accounts receivable are amounts a company has a
right to collect because it sold goods or services on
credit to a customer. Accounts payable are liabilities.
Accounts receivable are assets.

Let’s assume that Company A sells merchandise to Company B
on credit. (Perhaps the invoice states that the amount is
due in 30 days.) Company A will record a sale and will also
record an account receivable. Company B will record the
purchase (perhaps as inventory) and will also record an
account payable.

Our example reminds me of an old saying, “There are two
sides to every transaction.” In accounting we also expect
symmetry: Company A has a sale and a receivable, Company B
has a purchase and a payable.

The following suggestions are under consideration: (a) 10% reduction in price to yield an increase in sales volume from 6600 to 7400 units. Current unit price Rs. 1,000 Unit variable cost Rs. 500 Fixed cost Rs. 30,00,000 Prepare a statement comparing gross revenue, profit, contribution and P/V ratio of the two alternatives with present results. Which suggestion would you recommend?

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