Accounting for Accounts Receivable

Service performed on credit RM7,000

• Dr Cash Cr. Service revenue

• Dr Account Receivable Cr. Service revenue

• Dr Account Payable Cr. Service revenue

• Dr. Service expense Cr. Cash

Which account is debited when a service is performed on credit?

• Cash

• Accounts Receivable

• Accounts Payable

• Service Expense

What is the correct journal entry for a service performed on credit?

• Dr Cash, Cr Service Revenue

• Dr Accounts Receivable, Cr Service Revenue

• Dr Accounts Payable, Cr Service Revenue

• Dr Service Expense, Cr Cash

When a customer pays their outstanding balance, which account is credited?

• Cash

• Accounts Receivable

• Service Revenue

• Accounts Payable

What happens to the Accounts Receivable account when a payment is received?

• It increases

• It decreases

• It remains the same

• It is transferred to Accounts Payable

Which account is affected when a company writes off an uncollectible account?

• Accounts Receivable

• Bad Debt Expense

• Cash

• Service Revenue

What is the impact on the balance sheet when accounts receivable are collected?

• Assets increase

• Liabilities increase

• Assets decrease

• Equity increases

How is the allowance for doubtful accounts used in accounting for accounts receivable?

• To increase revenue

• To estimate uncollectible accounts

• To decrease liabilities

• To record cash payments

What is the primary purpose of aging accounts receivable?

• To determine cash flow

• To estimate bad debts

• To calculate interest

• To increase sales

Which financial statement is directly affected by accounts receivable?

• Income Statement

• Balance Sheet

• Cash Flow Statement

• Statement of Retained Earnings