Eagle News Has a $6,000 Account Receivable from One of Its

question 124

Multiple Choice

Eagle News has a $6,000 account receivable from one of its advertisers,Allwood Floors.When Eagle receives $3,600 from Allwood as partial payment:

• A)Eagle should debit Accounts Receivable for $3,600.
• B)Eagle should credit Cash for $3,600.
• C)Eagle should credit Accounts Receivable for $3,600.
• D)Eagle makes no journal entry until the total of $6,000 is received from Allwood.

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Definitions:

Commercial Banks

Financial institutions that accept deposits, offer various loans, and provide other financial services to individuals and businesses.

Reserves

Typically refers to deposits that banks hold at the central bank plus the cash in vaults, or to the quantities of a resource (like oil or gold) that are known to be available.

Cash

Money in the form of notes and coins, representing immediate purchasing power and liquidity.

Bank Vaults

Secure rooms where banks and other financial institutions store money, valuable documents, and other assets.