If $90,000 Is Owed by Customers at the Beginning of the Year

question 44

Multiple Choice

If $90,000 is owed by customers at the beginning of the year, $75,000 is owed at the end and credit sales are $120,000, the cash received from customers is:

• A)$120,000.
• B)$80,000.
• C)$125,000.
• D)$135,000.

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Definitions:

Credit Balance

Indicates the amounts credited on the right side of the balance sheet, usually representing liabilities, revenue, or equity.

T Account

A graphical representation of a ledger account, used in accounting to depict debits and credits for a specific account.

Debit Side

refers to the left-hand side of a ledger account that records increases in assets, expenses, and decreases in liabilities and equity.

Credit Side

The right side of an account in double-entry bookkeeping, typically used to record increases in liabilities, revenue, or equity.