 Alright now we're looking at the accounts receivable. There's two things that could happen to the accounts receivable that we're gonna focus on at least With regards to the adjusting entry One is the timing of when an invoice has been put in place and the other has to do with those Deposits that are gonna be in place. So let's go to the tab to the right I'm gonna right-click on the tab to the right and duplicate it to take a look at the sub ledger Related to the accounts receivable going down to the reports on the left-hand side and Closing the boogie. I'm gonna scroll down to who owes you reports and let's look at the customer balance detail report This is kind of like the sub ledger for the accounts receivable So that looks good now note You'll only have accounts receivable if you're on an accruable basis remember that The revenue cycle will end hopefully with cash going up at the end of the cycle if you're on a very simple System due to the industry you're in you might just record revenue with a deposit type of form Possibly with the bank fees if you're getting paid by a platform like a YouTube or you might have a cash register Situation where you collect the cash and then make the deposits or you might be in a situation Where you have to do the work invoice the clients That's when you have to track the accounts receivable that will be driven typically by industry accounts receivable is an accrual account by definition We're deviating from a cash-based system So now we're tracking the accounts receivable in the sub ledger and we could have instances then where we get paid Before we actually do the work. That's one thing that could happen with the receivables That's when we ended up with this negative kind of amount for Eric music. We'll talk about that one later That's like an unearned revenue kind of issue with a little bit of a twist on it The other kind of issue the one we're gonna deal with now with relation to accounts receivable is a timing issue and The example we're gonna have here note that revenue is recorded with QuickBooks when we enter the invoice But it's possible That we did the work before the cutoff and didn't enter the invoice until after the cutoff Meaning the fact that revenues the invoice is the closest form to the point in time that we did the work Revenue should be recorded in an accrual basis when we do the work not necessarily when we enter the invoice so You can imagine especially in a job cost situation where we did the work before the cutoff sometime in February But we didn't enter the actual invoice until March So generally then to be on a perfect accrual system You would have to pull the revenue from that invoice back into before the cutoff back into February That's gonna think that the situation will imagine here. This might not happen all the time for like small businesses You might not worry about that too much But when you're an auditing type of situation that that timing difference Is revenue being recorded in the proper period when the work is done is an important difference If people were trying to distort their financial statements, for example Then oftentimes they play with the timing differences in terms of it was revenue recorded in the proper period for example