Final answer:
Joan received a $24,000 credit invoice for goods sold last month, with a partial payment of $12,000 made by cheque, indicating a deferred payment arrangement. The accounting impact involves reducing accounts receivable by $12,000 while awaiting the realization of the cheque.
Step-by-step explanation:
Joan's recent credit sale invoiced at $24,000 involves a partial payment of $12,000 received via cheque. The credit sale represents goods sold with deferred payment, and the invoice serves as a formal record of the transaction. The receipt of $12,000, denoted as half of the invoice amount, is crucial for accounting. It involves a debit to the cash (or bank) account and a credit to accounts receivable, reflecting the reduction in the outstanding amount owed by the customer. The mention of payment by cheque signifies a promise to pay, and further processing is needed before it transforms into cash. This scenario highlights the financial intricacies associated with credit sales, invoicing, and the subsequent partial receipt of payment.
Credit Sales and Invoicing:
When goods are sold on credit, it means that the buyer is allowed to defer payment to a later date, typically specified in the credit terms. In this case, Joan made a credit sale amounting to $24,000. The term "credit sale" implies that the buyer did not make an immediate payment but rather agreed to pay at a later date.
Invoicing is a crucial step in the credit sales process. An invoice serves as a formal document that outlines the details of the transaction, including the quantity and description of the goods, the agreed-upon price, and the payment terms. In this scenario, the invoice issued to the buyer, who is Joan's customer, amounted to $24,000.
Receipt of Payment:
The fact that only half of the invoice amount has been received indicates that Joan has received a payment of $12,000. Moreover, it is specified that this payment was made by cheque. Let's explore the implications of this partial payment and the use of a cheque in the context of accounting and business operations.
Partial Payment and Accounts Receivable:
Joan's accounts receivable (the amount owed to her by the customer) is reduced by the amount of the payment received. In this case, the $12,000 payment reduces the outstanding accounts receivable related to the $24,000 invoice. The remaining $12,000 of the invoice still represents an outstanding receivable.
Cheque Payment:
The mention of payment being made by cheque is relevant because it introduces an additional layer of financial processing. When a customer pays by cheque, it signifies a promise to pay, and the cheque serves as a negotiable instrument. The act of receiving a cheque does not immediately translate into cash; it requires further processing.