A Business Maintains a Separate Accounts Receivable Account for Each

question 159

True/False

A business maintains a separate Accounts Receivable account for each customer in order to account for payments received from the customer and amounts still owed by the customer.

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Definitions:

Interest Payable

The amount of interest expense that has accrued but has not yet been paid by the company.

Accounts Payable

An accounting entry representing an entity's obligation to pay off a short-term debt to its creditors or suppliers.

Notes Payable

A liability on a balance sheet representing promissory notes that a company must pay in the future.

Bad Debts Expense

The operating expense account that estimates the amount of credit sales that will probably not be collectible in a given accounting period when the Allowance method is used. For the direct write-off method, this account would be the actual amount written off.