Martin Company needs additional time to pay its accounts payable to Boster Company.Martin makes a written promise to pay Boster the amount on a certain date.Boster records this transaction as follows:
A)debit Notes Receivable; credit Accounts Receivable.
B)debit Cash; credit Accounts Receivable.
C)debit Accounts Receivable; credit Notes Receivable.
D)debit Notes Receivable; credit Cash.

Question

Quizplus · Accepted Answer

When Martin Company makes a written promise to pay Boster Company, Boster records this transaction as a note receivable, indicating Boster is to receive payment in the future. The credit to accounts receivable reflects the reduction in the open account balance owed by Martin as it is now formalized through the note.

Martin Company Needs Additional Time to Pay Its Accounts Payable