Calculation of Account Receivable and Account Payable

Account Payable

Account payable are those form which we have bought some thing and now we have to pay them the cash or check in return of their services or material we have purchased in accounting term we call them creditor.

To calculate the total account payable or total creditor is very simple here I am giving how to calculate accountable or creditors

Step 1

Obtain the credit ledger (list of creditor / list of people to whom we have to pay – with their amounts)

Step 2

Calculate the closing balance like that, (closing balance = total amount of purchase  or services – (less) the amount we have already paid) you will left with the amount we still have to pay , in other word you have to calculate remaining balance to pay that’s it. Now calculate this for each person separately

Account Receivable

Account receivables are those who have bought some thing from us and now they have to pay us, in accounting term they are called as Debtors

To calculate the total amount of debtors is also very simple here i am giving how to calculate debtor step by step

Step 1

Obtain the Debit ledger (list of Debtors / list of people who has to pay to us – with their amounts)

Step 2

Calculate the closing balance like that, (closing balance = total amount of Sale or services  – (less) the amount we have already taken) you will left with the amount we still have to take from them , in other word you have to calculate remaining balance to receive form them that’s it. Now calculate this for each customer separately

Mixed payable and receivable

This is the case when you have same list for payable and receivable, or there may be some you’re regular customer who pays you in advance or you are regular customer to whom you pay advance something like that, to get the list of payable and receivable from such situation is different but not difficult

Get the ledger and check that to which one has to pay how much and how much he has paid if he paid less then he has to pay he will go in receivable list , if someone paid more than he has to pay then he will go in payable list similarly check it form our side if we paid less amount then man will appear in our pay abele list with remaining balance and vice versa

Special Note

(* One thing to remember if you are doing the cash base account you will take the payment up to the date on which you are calculating i.e. if you are calculating on 10 June but calculation are base on 1 June then you will take the balance and amount of 1 June, if you are calculating on Accrual bases then you will take into account the amount which you customer have paid you but not appearing in your account and the amount you have paid but not appearing in his account but with special notes.)