=Cash Receipts.= For installment collections, it is well to provide a special cash receipt book. Such a form is shown in Fig. 25. This form is used exclusively for installment receipts, and payments are posted direct to the installment ledger. The total cash for the day is entered as one item in the general cash book.
=Statement of Installment Ledger.= From an accounting standpoint, installment accounts present certain difficulties not experienced in the handling of other classes of accounts receivable. There is always a question as to the real value of the accounts outstanding, a doubt as to the advisability of including the total balances in a statement of assets. A live account--one on which payments are being made regularly--is legitimately considered as good an asset as any other account receivable, but the value of the delinquent account--when payments are past due--is questionable, and if included in a balance sheet, the nature of the asset should be clearly stated.
That the actual condition of these accounts may be shown on the general ledger, it is the better practice to carry two accounts, representing live and delinquent accounts. Installment sales should be charged to an _Installment Accounts Receivable_ account, and payments credited to the same account, which then becomes a general ledger controlling account of the live accounts in the installment ledger. Another account should be opened in the general ledger under some such caption as _Installment Accounts Delinquent_. When accounts become delinquent, they should be transferred by journal entry to this account. The journal entry would be:
_Installment Accounts Delinquent Installment Accounts Receivable_
This transfer may be made daily, weekly, or monthly, but the period between transfers should never be longer than one month. Delinquent accounts may be indicated in the installment ledger by placing a metal tab of some distinctive color on the ledger sheet or card, or they may be segregated by transferring them to a special delinquent binder or file.
[Illustration: Fig. 26. Daily Report of Installment Accounts for the Credit Man]
When a payment is received on a delinquent account, that account immediately becomes live, and the amount should be transferred by journal entry to _Installment Accounts Receivable_. The journal entry would be: