If a customer owes interest on accounts receivable, Interest Revenue is debited and Accounts Receivable is credited.

Name: If a customer owes interest on accounts receivable, Interest Revenue is debited and Accounts Receivable is credited.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Interest Revenue should be credited, not debited, when recording interest earned on accounts receivable, as it increases the company's income. Accounts Receivable is debited to reflect the increase in the amount owed by the customer.

If a Customer Owes Interest on Accounts Receivable, Interest Revenue