The Accounts Receivable account has a $20,000 debit balance in the unadjusted trial balance. There is a $1,000 debit adjustment to Accounts Receivable. The adjusted trial balance will show Accounts Receivable as a:

Question

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The $20,000 debit balance in the unadjusted trial balance indicates that the company has recorded $20,000 of sales on credit that have not yet been collected. The $1,000 debit adjustment to Accounts Receivable suggests that an additional amount has been added to the balance of this account, possibly as a result of additional credit sales. Therefore, the adjusted trial balance will show a higher debit balance in Accounts Receivable. Thus, the correct answer is (C) $21,000 debit balance.

The Accounts Receivable Account Has a $20,000 Debit Balance in the Unadjusted