When a Business Is Able to Deposit Its Credit Card

question 141

True/False

When a business is able to deposit its credit card sales invoices directly into a special bank account,it debits Accounts Receivable.

---

Definitions:

Market Rate

The prevailing interest rate available in the market for loans or the return on investment securities.

Adjusting Entry

An accounting journal entry made at the end of an accounting period to update the accounts and ensure they comply with the accrual basis of accounting.

Borrowing Rate

The interest rate that a financial institution charges a borrower for the use of money.

Principal

The original sum of money borrowed in a loan, or the amount of the loan that has yet to be repaid, excluding interest.