Accounts receivable is an asset that arises when a company:
A)purchases goods or services on credit.
B)sells goods or services on credit.
C)purchases goods or services for cash.
D)sells goods or services for cash.

Question

Quizplus · Accepted Answer

Accounts receivable is created when a company sells goods or services to a customer on credit, meaning the customer will pay for the goods or services at a later date. Therefore, choice B is correct because it involves the sale of goods or services on credit. The other choices (A, C, and D) do not result in the creation of accounts receivable because there is no sale on credit involved.

Accounts Receivable Is an Asset That Arises When a Company