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Worked-example setupScope and assumptions
- The fictional worklist states gross amounts, not approved financial-statement balances.
- The confirmed rights are enforceable; the disputed invoice's entitlement remains unresolved.
- There are no related parties or rights to offset balances between counterparties. The normal operating cycle is shorter than one year.
- The ordinary customer account has no changes beyond the supplied credit sales and collections.
- Period
- Year ended December 31
- Units
- US dollars
- Rounding
- Whole US dollars; no rounding required
Juniper Services is a fictional company reviewing this worklist at December 31. The preparer called every debit a receivable and subtracted the customer credit. That arithmetic does not establish what Juniper can report as receivables.
| Item | Gross amount | Payment facts and classification |
|---|---|---|
| Ordinary customer account | $8,000 debit | Performance complete; unconditional payment due next month. Current trade receivable. |
| Conditional service right | $3,500 debit | Performance has occurred, but the right still depends on a further service milestone. Contract asset; maturity evidence is incomplete. |
| Employee advance | $2,000 debit | Repayable in cash next month. Current nontrade receivable. |
| Equipment-sale note | $7,000 debit | Sale of used operating equipment outside ordinary sales; principal due in nine months. Current nontrade note. Ignore interest for this classification. |
| Disputed invoice | $2,500 debit | The file lacks the signed price terms and dispute details. Keep it separate pending review. |
| Customer overpayment | $1,000 credit | Refundable to another customer, with no future performance owed. Separate liability. |
Build totals with a stated purpose
Confirmed unconditional rights are $8,000 plus $2,000 plus $7,000, or $17,000. The conditional $3,500 right belongs outside that group. The disputed invoice cannot enter it merely because the preparer issued an invoice.
All worklist debits total $23,000. Subtracting the $1,000 credit produces a $22,000 signed control total. The preparer can reconcile that total to the source records, but cannot call it the approved receivable balance. It mixes rights with different conditions and nets a liability against unrelated claims.
The conditional-right distinction comes from ASC 606-10-45-3 and 45-4. A contract asset can require its own credit-loss analysis even though it stays outside the unconditional-receivable group. Excluding it from this group does not exclude it from all allowance work.
Explain why collections differ from revenue
The ordinary customer account opened at $5,000. Qualifying credit sales added $7,000 and collections reduced it by $4,000, leaving $8,000. Its $3,000 increase explains why collections were $3,000 below credit-sales revenue in this bounded period. The other worklist balances are separate from that account's movement.
Resolve the missing evidence
For the disputed invoice, obtain the signed price terms, evidence of completed performance, and the customer's reason for disputing payment. An expected price concession and later inability to pay can require different accounting work. Do not choose between them from the cash forecast alone.
Before approving a financial-statement caption, complete the separate recognition, maturity, measurement, allowance, and presentation work. The checked sums verify the selected amounts, not those judgments. Apply the same method to the independent rights-and-population practice.
Verified calculation · scoped sums
The curriculum loader recomputed this example before it entered the site build. Expand any structured input to inspect the stated facts.
- amounts
- 9 fields
Inspect data
{
"collections": -4000,
"conditional_right": 3500,
"credit_sales": 7000,
"customer_account": 8000,
"disputed_invoice": 2500,
"employee_advance": 2000,
"equipment_note": 7000,
"opening_customer_account": 5000,
"refundable_credit": -1000
}- totals
- 5 fields
Inspect data
{
"confirmed_unconditional_rights": [
"customer_account",
"employee_advance",
"equipment_note"
],
"customer_account_increase": [
"credit_sales",
"collections"
],
"customer_account_rollforward": [
"opening_customer_account",
"credit_sales",
"collections"
],
"debit_worklist": [
"customer_account",
"conditional_right",
"employee_advance",
"equipment_note",
"disputed_invoice"
],
"signed_worklist": [
"customer_account",
"conditional_right",
"employee_advance",
"equipment_note",
"disputed_invoice",
"refundable_credit"
]
}Recomputed result
| Measure | Value |
|---|---|
| confirmed unconditional rights | 17,000 |
| customer account increase | 3,000 |
| customer account rollforward | 8,000 |
| debit worklist | 23,000 |
| signed worklist | 22,000 |