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1) Accounts receivable counts as an asset as the amount owed to the company will be converted to cash later. More receivables equal more cash, which contributes to the growth of a business overtime which makes it not a liability. Accounts receivables is an asset because it’s defined as money owed to a company by a customer. (GoCardlessltd.et al., 2020). It measures the money that customers owe to a business for goods and or services already provided. The four basic task to perform is accounts receivables are establishing credit practices, invoicing customers, tracking payments received and payment due and accounting for accounts received. An account receivable cycle starts when a service/ product has been delivered, but not yet paid for and is completed when the invoice is settled in the amount is paid in full (Blanley, B. et al., 2022). Some example of account receivables that’s counted as assets are utilities company that bills its customers after providing them with electricity, land, buildings investments, and prepaid insurance.

2) Accounts receivables are recorded as assets because it is cash received for a service or product. The four-basic task in accounts receivable are quotes, sales orders, sales invoicing, and receiving money.  I will briefly describe each one of the four tasks in accounts receivable. Quotes are a written estimate given to a customer to quote a particular product or service that will be provided and how much that service or product will cost. When given a quote the customer and bioth parties agree upon the service/product for a particular price.   A sales order is provided to a customer for tracking backorders.  Sales invoicing is a bill that is given to the customer when items have been shipped or services have been promised. The last task of accounts receivable is actually receiving the money/payment from the customers for the service provided or product received. These are the four basic tasks of accounts receivable

3) A purchase discount is a discount that is offered by a vendor if the invoice is paid within a certain timeframe. For example, some of the terms they use are 2/10 or n/30.  2/10 means if you pay the invoice within 10 days, they will offer a 2% discount off of the invoice.  N/30 or net/30 means there is no discount offered if you pay it within 30 days. The purpose of vendors offering a purchase discount is to increase their inflow of cash. Late payments can put a strain on the company's cash flow. So, by offering an incentive for customers to pay early some of them will do so and that in turn will increase the inflow of cash. Some companies may offer ACH or EFT methods to receive funds instead of the traditional pay by check, this would also help with receiving payments faster. So, if you are thinking about doing this for your business you may want to do a little research to see what means are best for you and your business

4) An understanding of Inventory refers to the materials used in production as wells as the goods produced that’s available for sale. This can include raw materials, work-in-progress, and finished goods. A company’s inventory is one of the most important assets. Some examples of inventory can include, goods, materials held by a business for selling in the market to earn a profit and merchandise. Sometimes, it’s necessary to adjust levels to reflect changes in your actual inventory count that may not be in your records. Inventory adjustments refers to adjustment entries made in periodic accounting to account for differences (Murphy, K. et al., 2020). When adjusting entries are used two separate entries are made. The adjusting entry clears the inventory account’s beginning balance and the second entry debits inventory and credits income summary. Inventory adjustments occur when the actual quantity of items does not match the recorded quantity (Contributor, C. et al., 2020). This Is necessary in a business to modify the value and/or quantity of stock in your business.

5) There are 2 types of inventories businesses can use.  Periodic and perpetual.  Periodic inventory is one that involved physically counting the inventory you have.  Perpetual inventory is computerized. The computer keeps track of the inventory and is updated automatically when a product is sold. No matter which one you do there has to be end of the year accounting period to determine how much inventory the business has on hand. Inventory adjustments can come from a range of different reasons such as waste, something breaks, lost or stolen inventory. Inventory adjustments are important because not matter what the reason the inventory is lost or broken it needs to be adjusted off of what you have. You need to know truly what inventory you have on hand so you know when to order so you never run out of something you may need. In order to run a successful business inventory is crucial.