Alpha sold $2,000 of services to Beta on credit.Beta promised to pay for it next month.Beta will report a $2,000:

Question

Quizplus · Accepted Answer

When Alpha sold services to Beta on credit, Beta promised to pay for it next month, which means that Beta owes Alpha $2,000. This creates an account payable for Beta, making option A the correct answer. Option B, accounts receivable, would be the correct answer if Alpha was the one who owed Beta money. Option C is incorrect because there is no decrease in cash since no one has received or paid money yet. Option D is incorrect because the sale of services does not affect net income until the payment is received.

Alpha Sold $2,000 of Services to Beta on Credit