On July 31,ALOE Inc.received $5,000 cash from a customer who previously purchased ALOE's products on account.What entry should ALOE Inc.record at the time it receives cash?

Question

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When ALOE Inc. receives $5,000 cash from a customer who previously purchased ALOE's products on account, it means the customer has paid off their accounts receivable balance. Therefore, ALOE Inc. should debit Cash for $5,000 and credit Accounts Receivable for $5,000 to reflect the payment received. Option A would be appropriate if the payment received was only a partial payment, while Option C involves a different account (Accounts Payable) and is not relevant to the scenario presented.