Accounts Payable, Accounts Receivable

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+<h1>Accounts Payable & Accounts Receivable</h1>
+
+<pre>
+A/R and A/P are kind of deep, 
+
+Anyways, let's consider A/R.  We can't really relate to A/P
+bcos we always pay *our* bills on time, don't we ?  :-)
+
+So anyways, let's say we give our customers 30 days to pay.
+
+When we make a sale, the two accounts affected are Sales (an
+income account) and A/R.  A/R is an asset, but it's not liquid,
+and it's not quite cash.
+
+Then when they come by to pay their bill, dropping off a big bag
+of twenty-dollar bills, we transfer the amount from A/R to Cash.
+
+The reason we do it in two steps is that we've decided to do
+our accounting on an accrual basis and not on a cash basis,
+bcos, well, most of our transactions are not cash, they're
+obligations.
+
+We report sales in our sales figures as soon as we make them,
+but if the auditor wants to know about whether we're gonna get
+stuck with bad debts, we break down those A/R's by how old they
+are: 0-30 says, 31-60 says, etc.  At some point when a particular
+debt is "written off", like when the cheesing bastards go bankrupt,
+we dock both A/R and Sales, so we're going back and patching up
+(or rather, "patching down") the Sales account to show that the
+Sale was never made good.
+
+We can use the same technique for things that we prepay.  If
+we have to plunk down six months' rent in advance, that is an
+"accrued asset", and while it put a healthy dent in the Cash
+account, it does show on the books as an asset.  And if we've
+been collecting payroll taxes from our employees and keeping
+them in a special bank account, the money's not really ours,
+so we have a growth in the Cash account on one side, and a
+growth in an Accrued Liability, namely, Payroll Taxes Payable,
+on the toher side.  When we send the quarterly check to the
+Feds so that they can make payroll too, our liability drops
+and so does our Cash account.
+
+</pre>
+