Invoicing for September

On September 25, your company processes the invoice. The workfile contains a new transaction for 172.50. The system uses these calculations for the workfile transaction:

150.00 cost × 15 percent markup = 22.501

50.00 cost + 22.50 = 172.50

The system creates this journal entry for the invoice:

G/L Date	Account	Debit	Credit
September 25, 2005	Accounts Receivable	1,150.00
September 25, 2005	Accrued Revenue		(1,150.00)

The workfile transactions for June, July, and September have not yet been invoiced. The system adds the invoice amounts for the three months to create an invoice amount of 1,150.00.

This illustration shows the T-account postings in the general ledger:

The system uses these AAIs to direct the system to create the journal entries:

• Billing AAI table number 4832 directs the system to the base rules for the accrued accounts receivable account.

  It creates a credit journal entry for the invoice amount. The accrued accounts receivable account now contains an unreconciled balance of 172.50.

• The RC AAI directs the system to the accounts receivable account.

  It creates a debit journal entry for the invoice amount.