Question

Credits in accounts are subject to clearing means

Answer 1

Cheque clearing (or check clearing in American English) or bank clearance is the process of moving a cheque from the bank in which it was deposited to the bank on which it was drawn, and the movement of the money in the opposite direction. This process is called the clearing cycle and normally results in a credit to the account at the bank of deposit, and an equivalent debit to the account at the bank on which it was drawn. If there was not enough funds in the account when the cheque arrived at the issuing bank, the cheque would be returned as a dishonoured cheque marked as non-sufficient funds.

Answer 2

This means that credits in any of the financial statements should be cleared by being paid for, the credits should not accumulate therefore the organization should use all the means possible to ensure that there is eradication of all debtors from the business for the success of any business especially the long term ones who finally makes the business to lag behind.