4,03 ACC1

Which of the following accounts has a normal credit balance?

• Cash

• Accounts Receivable

• Sales

• Supplies

A sale on account means that:

• The business immediately receives cash for goods or services

• The customer promises to pay at a later date

• The owner makes a withdrawal

• The company returns goods to a supplier

When a customer makes a payment on account, which account is debited?

• Accounts Receivable

• Cash

• Sales

• Owner’s Capital

In which situation would Owner’s Equity increase?

• The business borrows money from the bank

• A customer pays off their account

• The business makes a sale

• The owner withdraws funds

Which transaction affects only asset accounts?

• Paying a vendor on account

• Selling goods for cash

• Receiving payment on account from a customer

• Providing services on account

A company sells $800 of merchandise for cash. Which accounts are affected?

• Cash (debit) and Sales (credit)

• Accounts Receivable (debit) and Cash (credit)

• Sales (debit) and Owner’s Capital (credit)

• Cash (debit) and Accounts Receivable (credit)

When recording a sale on account, the debit and credit entries are:

• Debit Sales; Credit Cash

• Debit Accounts Receivable; Credit Sales

• Debit Owner’s Capital; Credit Sales

• Debit Accounts Payable; Credit Sales

Which of the following best describes the effect of recording a payment on account from a customer?

• Increases both total assets and owner’s equity

• Decreases total assets and owner’s equity

• Increases one asset while decreasing another

• Increases liabilities and decreases assets

A customer buys $2,000 in goods on account. Later, they pay $1,200 toward the balance. What is the remaining amount in Accounts Receivable?

• $2,000

• $800

• $3,200

• $1,200

Which journal entry correctly records a customer payment on account?

• Debit Cash; Credit Accounts Receivable

• Debit Sales; Credit Cash

• Debit Accounts Receivable; Credit Sales

• Debit Owner’s Capital; Credit Accounts Receivable