Difference between Unidentified, unapplied receipts and receipts on account


Unidentified:
you receive a cheque, you don’t know who(Customer) sent it. Source is unknown so you don’t give credit to anyone.
Now here identified means to ascertain the reasons for the receipt and to ensure that it is something should be owed by someone to us. If sent mistakenly, we will have to refund it back to the customer.
In application term, A standard receipt entered without customer information.


Unapplied:
you receive a cheque, you know who(Customer) sent it, but you don’t set it off against the invoices.
You just give credit.

The company would have identified the reasons for the payments they received but have not applied the funds. Reason could be there is no invoice or not yet created in system for the sale or the invoice number is unknown.
In application term, A standard receipt with customer info but not applied to any customer invoices.


On-Account:
you receive a cheque, you know who(Customer) sent it, but you park it in on-account so you cannot set it off against the invoices. Still giving him credit.
An on-account receipt could be against cash-in-advance or against lump-sum credit given to customer but not specific to any invoice. When the invoices are identified then on-account credit can be moved back to unapplied amount can then be applied to identified transactions.

A cash receipt is an applied receipt if it is associated with a customer number and an open invoice(s).

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