Answer to Question #244009 in Accounting for nicole

Question

7. Suppose Ms. Ellana has to owe you money for selling goods on May 12, 2021 and she

will be going to pay only on November 2, 2021, prove that your accounts receivable is

current in nature.

Answer 1

The fact that Ms Ellena pays within the current financial year (ending on 31st Dec, 2021) in this case, the debt is classified as a current asset in the books of account.

It would be a non current asset if cash was to be received in the following financial year or a year after the account receivable date.