A Credit Is Not the Normal Balance for

question 85

Multiple Choice

A credit is not the normal balance for

• A) common shares.
• B) revenues.
• C) liabilities.
• D) cash.

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Definitions:

Income Statement

The Income Statement is a financial statement that shows a company's revenues and expenses over a specific period, resulting in a net income or loss.

Accounts Receivable

The money owed to a company by its customers for goods or services delivered but not yet paid for.

Average Collection Period

The average amount of time that a receivable is outstanding; calculated by dividing 365 days by the accounts receivable turnover.

Net Credit Sales

Total sales made on credit minus returns and allowances, indicating the actual sales revenue expected to be collected.