When a Company Makes a Sale and Accepts a Credit

question 3

Multiple Choice

When a company makes a sale and accepts a credit card payment from a customer,the company:

• A)debits Cash.
• B)credits Accounts Receivable.
• C)credits Cash.
• D)debits Accounts Receivable.

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Definitions:

Debtors

Individuals or entities that owe money to another entity, typically referring to those owing money as recorded by the creditor.

Creditors

Individuals or institutions that lend money or extend credit to others, expecting to be repaid in the future, often with interest.

Corporation

A legal entity that is separate and distinct from its owners, with the ability to own property, incur liabilities, and conduct business activities.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the goal of a firm's shareholders' wealth maximization.