A customer with an overdue account of $450 pays $150 on account. Which of the following is the most appropriate journal entry to record this transaction?
A) $\begin{array} { | r | r | r | }
\hline \text { Cash } & 150 & \
\hline \text { Bad debts expense } & 300 & \
\hline \text { Accounts receivable } & & 450 \
\hline
\end{array}$
B) $\begin{array} { | l | r | r | }
\hline { \text { Cash } } & 150 \
\hline \text { Notes receivable } & 300 & \
\hline \text { Accounts receivable } & & 450 \
\hline
\end{array}$
C) $\begin{array} { | c | r | r | }
\hline \text { Accounts receivable } & 450 & \
\hline \text { Cash } & & 450 \
\hline
\end{array}$
D) $\begin{array} { | l | r | r | }
\hline \text { Cash } & 150 & \
\hline \text { Accounts receivable } & & 150 \
\hline
\end{array}$

Question

A customer with an overdue account of $450 pays $150 on account. Which of the following is the most appropriate journal entry to record this transaction?
A) $\begin{array} { | r | r | r | } 
\hline \text { Cash } & 150 & \
\hline \text { Bad debts expense } & 300 & \
\hline \text { Accounts receivable } & & 450 \
\hline
\end{array}$
B) $\begin{array} { | l | r | r | } 
\hline { \text { Cash } } & 150 \
\hline \text { Notes receivable } & 300 & \
\hline \text { Accounts receivable } & & 450 \
\hline
\end{array}$
C) $\begin{array} { | c | r | r | } 
\hline \text { Accounts receivable } & 450 & \
\hline \text { Cash } & & 450 \
\hline
\end{array}$
D) $\begin{array} { | l | r | r | } 
\hline \text { Cash } & 150 & \
\hline \text { Accounts receivable } & & 150 \
\hline
\end{array}$

Quizplus · Accepted Answer

The correct journal entry for a payment on account is to debit Cash for the amount received ($150) and credit Accounts Receivable for the same amount, indicating that the customer's outstanding balance has been reduced by the payment.

A Customer with an Overdue Account of $450 Pays $150