The entry to collect cash on account involves a
A)debit to Cash and a credit to Accounts Payable.
B)debit to Accounts Receivable and a credit to Cash.
C)debit to Cash and a credit to Accounts Receivable.
D)debit to Accounts Receivable and a credit to Accounts Payable.
E)debit to Cash and a credit to Sales Revenue.

Question

Quizplus · Accepted Answer

When a business collects cash on account from a customer, it is essentially receiving payment for an amount that the customer owes. This transaction involves a debit to Cash (increasing it) and a credit to Accounts Receivable (decreasing it), since the customer's account balance is decreasing as they pay off their debt. Therefore, option C is the correct choice, which shows a debit to Cash and a credit to Accounts Receivable.

The Entry to Collect Cash on Account Involves a