Bailey Ltd sold goods to Andrews Ltd for $1000. Andrews Ltd paid the account 28 days later. Ignoring GST, the correct entry in Bailey Ltd's books to record the payment by Andrews Ltd is:

Question

Quizplus · Accepted Answer

When Andrews Ltd pays the account 28 days later, Bailey Ltd receives cash, so the correct entry is to debit Cash at bank and credit Accounts receivable. Option A and D are incorrect because they do not reflect the transaction correctly. Option C is also incorrect because Equity is not affected by this transaction.

Bailey Ltd Sold Goods to Andrews Ltd for $1000