A Business Collects Cash from a Customer in Payment of Accounts

question 65

Multiple Choice

A business collects cash from a customer in payment of accounts receivable.Which account is credited?

• A)Supplies
• B)Cash
• C)Accounts receivable
• D)Service revenue

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Definitions:

Prior Period Adjustment

An accounting entry made to correct errors that were made in previous financial reporting periods.

Amortization Expense

The process of gradually writing off the initial cost of an intangible asset over its useful life.

Statement Of Retained Earnings

This is a financial statement that outlines the changes in retained earnings for a specific period, factoring in net income and dividends.

Income Statement

A financial statement that shows a company's revenues and expenses over a particular period, culminating in its net income or loss.