Each college or department is responsible for determining whether the extension of credit in specific cases is appropriate and in the best interest of the university to do so. A process to ensure that the requested extension of credit is not a prohibited transaction. A procedure for ensuring that any extension of credit is done so in a prudent manner, including the use of standardized credit applications, commercial credit reports and specification of the level of authority required for approval of the requested credit. Establishment of the billing, accounting and collection procedures for recording and monitoring the credit extended and ensuring that the agreed upon payment is received. Account Receivable - An asset that represents a claim against another entity for goods or services that have been provided, but for which cash has not been received.
Payment is due to the seller from the buyer.
The revenue from the transaction has been recognized in the seller's books and records. Total outstanding accounts receivable for a department are deemed by the Associate Vice President for Finance to be material to the financial records of the department and thus to the university. The accounts receivable does not represent an extension of credit that is prohibited by law. The recording is deemed to be appropriate by the university's accounting officers. These entries credit the appropriate revenue subcode on a departmental subsidiary ledger account and debit the appropriate account receivable account control on the departmental general ledger account.