The balance sheet accounts in the revenue business process are
A)cash and allowance for uncollectible accounts
B)cash and accounts receivable
C)accounts receivable and allowance for uncollectible accounts
D)accounts receivable and revenue

Question

Quizplus · Accepted Answer

The revenue business process involves the recognition and collection of revenue. Accounts receivable (an asset account) is recorded as revenue is earned but not yet collected. Given that some customers may not pay their invoices, an allowance for uncollectible accounts (a contra asset account) is typically recorded to account for potential losses. Cash is not necessarily directly involved in the revenue process, as revenue may be recognized before payment is received.

The Balance Sheet Accounts in the Revenue Business Process Are