Accounting Training

Chapter 5
Accounts Receivable
Accounts Payable

Copyright ©Jerry Belch 2015
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Chapter 5 Worksheet
Practice Invoice
Invoice Spreadsheet
Practice Purchase Order
Blank Purchase Order
Purchase Order Spreadsheet
Chapter Test

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Accounting Terms in This Chapter
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Charge Sales
Accounts Receivable
Spreadsheet for AR.
Accounts Payable
Purchase Order


Accounts Receivable

When you go to trade fairs, most of your sales will be charge sales. A charge sale means that the customer will pay you later for the service or merchandise that they just bought. There is considerably more accounting work to be done for a charge sale verses a cash sale. You need to keep track of all of these customers, what they bought, the price of these items or services and how to contact them. Collectively all of these charge sale amounts are classified as a general ledger account called accounts receivable. First, let's look at an invoice. This is the form you fill out when you complete the sale. The invoice is the source document for recording the sale of merchandise or service on account. A sample invoice is included. Just click on the link for invoice to see a sample.
Why don't we practice on filling out an invoice. During a trade fair, you want to be sure to fill it out quickly and accurately. Remember, a judge looks at how you handle the paper work during the judging of salesmanship. Remember to give the customer a copy and save one for yourself. Here is the information for the invoice. Remember to print out a copy when finished.
Make sure that your sales department knows how to properly fill out an invoice.
They should go through
the Step By Step Tutorial on Invoicing

Information needed to fill out the practice invoice
  • A new bride to be, her father, the maid of honor and the best man go to Bromley's in preparation for the upcoming wedding.
  • Dad has generously opted to pay the bill for the formal wear.
  • His name is George Mason.
  • His business is Mason Contractors.
  • His home address is 4720 Alamar, Santa Barbara, CA 93101.
  • The invoice date is today's date and the invoice number is 1101.
  • Invoice numbers are normally preprinted on invoices or automatically assigned.
  • The numbers should be sequential so that all invoice forms can be accounted for.
  • The following information relates to the purchase.
    1. Tax is .0775.
    2. VE International has the sales tax at 7% for all sales.
    3. The amount should be remitted monthly
    4. Bride's dress $1,300.00
    5. Maid of Honor dress $650.00
    6. Both Tuxexos $175.00 each
    7. Mr. Mason's email address is
    8. Fill in the information given.
    9. Remember to multiple the quantity for the tuxedos by two.
    10. Add up all amounts to get a subtotal.
    11. Calculate the tax by multiplying the subtotal by .0775.
    12. The percentage of sales tax is calculated differently by each county.
    13. To convert a percentage to a decimal, move the decimal point two places to the left. For example, 7 1/2 percent would be written as 7.5%.
    14. When you move the decimal to the left, the decimal equivalent is .075.
    15. Add the tax to the subtotal to get the total of the invoice.
    16. When done, press the Verify Invoice button to see if any essential information is missing.
    17. You must fill in the top half of the invoice, at least one item, the subtotal, sales tax total and person making the invoice.
    18. The Clear button will erase all data from the sheet and let you start over.
    19. Remember to print out a copy for your instructor.

After completing the above invoice, create one for some of the products you sell using the Blank Invoice Template from the projects box. Print out a copy for your instructor and save a copy for your digital portfolio.
Accounts Receivable Spreadsheet
You will need to keep some type of a master list of invoices, dates, customers names and totals. This can be done by hand or using a spreadsheet program. To see an example of one, just click on the link for "invoice spreadsheet". You can use this spreadsheet to keep track of charges, payments and balances for each of your charge sale customers.
There is a sample of a partially filled out invoice spreadsheet in the first column to the right. You cans see that a $500.00 payment was received by Janet Coy. The formulas in the template will calculate the balance for you. As you will learn in later chapters the totals of the charges and the total of the payments will be posted to the accounts receivable account in the general ledger.
Later on in the lessons, when we learn about journalizing and posting, you will get to see how accounts receivable are normally handled using subsidiary ledgers and special journals.

Accounts Payable

Accounts payable are amounts which a company owes its creditors for goods and services purchased on credit. For example, Bromley's Formal Wear purchases tuxedos, suits, bride's dresses, shirts, ties and other formal wear from supplies like After Six, Oscar do la Renta, and others. They usually have two ways to buy these goods for resale to their customers: Cash or Credit. Accounts payable are liability accounts that are used when a company like Bromley's Formal Wear buy merchandise on credit from its suppliers. Purchase Orders are made when items are purchased on account. To see a purchase order form, click on the link on this page. To practice filling out a purchase order enter the following information.