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People know Affinity as a manufacturer of medical cables. As a manufacturer, we produce products, but there is lot of behind the scenes activities that makes our company successful. One of these activities is accounting. Proper accounting has a direct impact on our company’s financial state, future prospects and even our jobs.
Accounting is the language of business. It is a service whose function is to provide quantitative information which can be used to make decisions. There are many activities in accounting but most important are accounts payable and accounts receivable.
Accounts payable are amounts a company owes to others because it purchased goods or services on credit from a supplier or vendor. Accounts receivable are amounts a company is owed by others because it sold goods or services on credit to a customer.
Accounts payable are liabilities. Accounts receivable are assets.
For a company to be successful it must collect money owed to it by customers and most successful companies also pay their bills on time!