When Revenue Is Earned from Charge-Account Sales,the Accountant

question 101

Multiple Choice

When revenue is earned from charge-account sales,the accountant

• A) debits a revenue account and credits the capital account.
• B) debits Accounts Receivable and credits a revenue account.
• C) debits a revenue account and credits Accounts Receivable.
• D) debits Cash and credits a revenue account.

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Definitions:

Services

Intangible products provided to consumers, including healthcare, education, banking, and entertainment, distinct from physical goods.

Savings Function

A mathematical expression that depicts how savings vary with changes in income, usually stating that savings are a function of disposable income.

Induced Consumption

The portion of consumer spending that varies with changes in disposable income, suggesting that as people earn more, they spend more.

Autonomous Consumption

The level of consumption that occurs when income is zero, reflecting the basic level of consumption that does not vary with disposable income.