Difference between Gross sales Proceeds and Receivables

[Former Member]

Hi

Can anyone advise diff between gross sales proceeds and Receivables in A/R.

Is gross sales proceeds is subset of Receivables?

Many Thanks.

[Former Member]

<b>Gross proceeds of sales</b>" means the value proceeding or accruing from the sale of goods and/or for services rendered, without any deduction on account of the cost of property sold, the cost of materials used, labor costs, interest, discount paid, delivery costs, taxes, or any other expense whatsoever paid or accrued and without any deduction on account of losses.

while accounts receivalbes include the sales you made to a customer including cost of sales, revenues, aind all other charges you can think of for sellinf off a product to a cutomer.

Please reward points if helpfull.

Thanks

[former_member188826]

When a sale is made to a customer, usually the customer is incentivised to pay earlier, wherein he/she gets a discount for early payment. Gross sales represent the value that is recognized in the sales account and posted originally to the customer account.

It is not known at the time of sale, whether the customer will take advantage of the cash discount or not. The net receivables is a conservative approach of couting the receivables after the discount, as if every customer would take their cash discount.