A Sales Invoice Is Used as Documentation for a Journal

question 6

Multiple Choice

A sales invoice is used as documentation for a journal entry that requires a debit to

• A)Cash and a credit to Sales Revenue.
• B)Sales Returns and Allowances and a credit to Accounts Receivable.
• C)Accounts Receivable and a credit to Sales Revenue.
• D)Cash and a credit to Sales Returns and Allowances.

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Definitions:

Journal Entry

A record of financial transactions in the accounting books, indicating the accounts and amounts debited and credited.

Allowance for Doubtful Accounts

An estimation of the amount of credit sales that are expected to turn into bad debts.

Bad Debts Expense

The cost associated with accounts receivable that a company is unable to collect, considered an expense on the income statement.

Note Receivable

A financial asset representing a promise to receive a specific amount of money in the future, often with interest.