customers balance due used as a credit for our a/p to them

Question

Jun 21, 2007, 03:54 PM

outofbalance2

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Join Date: Jun 2007

Posts: 1

customers balance due used as a credit for our a/p to them

how is this entry completed.

Our customer xyz company owes us $1000.00 which of course is in our A/R, We in turn owe xyz company 250.00 which is in our A/P. The owner decided to tell xyz company to subtract what we owe them and mail a check for the difference and call it even....

accounting wise how is this handled?:

Answers

Jun 21, 2007, 04:33 PM	#2

CaptainForest Finance & Accounting Expert Join Date: Nov 2005 Location: Canada Posts: 3,672	Once you receive the cheque… Dr. Cash 750 Dr. AP 250 Cr. AR 1,000

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