BUSINESS ADMINISTRATION
PRINCIPLES AND PRACTICE OF MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Detailed explanation-1: -An accounts receivable record identifies the companies from which credit purchases were made and the amount purchased, paid, and owed.
Detailed explanation-2: -Credit sales refer to a sale in which the amount owed will be paid at a later date. In other words, credit sales are purchases made by customers who do not render payment in full, in cash, at the time of purchase.
Detailed explanation-3: -Accounts payable (AP) represents the amount that a company owes to its creditors and suppliers (also referred to as a current liability account). Accounts payable is recorded on the balance sheet under current liabilities.
Detailed explanation-4: -When goods are sold on credit, accounts receivables account is debited and sales account is credited with an equal amount in order to record this transaction.