Lisa purchased merchandise on credit from FTG Corporation. When she paid the bill, she indicated that the check should be applied to Invoices 123 and 431. What system for recording cash collections does FTG use?

Question

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FTG Corporation uses the open invoice system because Lisa specifically indicated which invoices the payment should be applied to. In the open invoice system, each invoice is recorded separately, and payments are applied to the specific invoices.

Lisa Purchased Merchandise on Credit from FTG Corporation