Partial list of account balances at the end of the year:

-Use the information above to answer the following question.Which of the following is an accurate description of the economic events involving Accounts Receivable as documented in the T-account above?
A) Sales to customers on account exceeded the payments received from customers on account.
B) Payments received from customers on account exceeded the sales made to customers on account.
C) The company paid off its debt more than it incurred new debt.
D) The company incurred more debt than it paid off.

Question

Partial list of account balances at the end of the year:
 
-Use the information above to answer the following question.Which of the following is an accurate description of the economic events involving Accounts Receivable as documented in the T-account above?
A) Sales to customers on account exceeded the payments received from customers on account. 
B) Payments received from customers on account exceeded the sales made to customers on account. 
C) The company paid off its debt more than it incurred new debt. 
D) The company incurred more debt than it paid off.

Quizplus · Accepted Answer

The increase in the Accounts Receivable balance suggests that sales were made to customers on account (i.e. credit sales) that have not yet been paid for, indicating that sales on account exceeded payments received from customers on account.

Partial List of Account Balances at the End of the Year