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Post Info TOPIC: receivable and payable at the same time
rafapak


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receivable and payable at the same time
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Hi guys

I would like to ask you for help. Let's say Mr Brown is our business partner. We sell some products to him and he sells some products to us. So for our company he is both receivable and payable. Since receivables and payables can be compensated when we trade with one business partner do we keep in our records only one account ( Mr Brown account ) the balance of which shows either money we owe to Mr Brown or money Mr Brown ows us? Is it reasonable to keep two accounts - one that shows increase or decrease in receivables and second one that shows increase or decrease in payables ?

 



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Cheshire


Master Book-keeper

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Hi
Keep two accounts in your records. Usually the accounts do not fully match each other, one owes more than the other although it is possible they could be the same, but for monitoring its best they are separate.
HTH

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
rafapak


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thanks for reply



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