Question
What accounts are affected and how when a payment on account is received from a customer.
A
Cash Credit and Purchases Debit.
B
Sales Debit and Cash Credit.
C
Cash Debit and Accounts Receivable Credit.
D
Miscellaneous Expense Debit and Cash Credit
A
Cash Credit and Purchases Debit.
B
Sales Debit and Cash Credit.
C
Cash Debit and Accounts Receivable Credit.
D
Miscellaneous Expense Debit and Cash Credit
Answers
GPT-4o mini
The correct answer is:
**C. Cash Debit and Accounts Receivable Credit.**
When a payment on account is received from a customer, the cash account (an asset) increases, which is recorded as a debit, and the accounts receivable account (another asset) decreases, which is recorded as a credit. This reflects that the customer has paid their outstanding balance and the company has received cash.
**C. Cash Debit and Accounts Receivable Credit.**
When a payment on account is received from a customer, the cash account (an asset) increases, which is recorded as a debit, and the accounts receivable account (another asset) decreases, which is recorded as a credit. This reflects that the customer has paid their outstanding balance and the company has received cash.