Question

The bank received and accepted a payment worth $7,200 from a customer on the company’s behalf. Which journal entry adjustment should the accountant make?
A.
Accounts receivable will be debited by $7,200.
B.
Accounts payable will be debited by $7,200.
C.
Accounts receivable will be credited by $7,200.
D.
Accounts payable will be credited by $7,200.

Answer 1

Answer:

C. Accounts receivable will be credited by $7,200

Explanation:

Accounts receivable are expected payments from customers. They exist because businesses sell goods and services to customers on credit. Account receivables are asset accounts. An increase in assets accounts is debited, and a decrease is credited.

If the banks received payment from a customer, it means a customer has paid for goods sold on credit. Accounts receivable have decreased ( to be credited), but cash in the bank has increased.