Cansing Company collected $5,000 from a customer on account.What journal entry will Cansing record?
A)Debit Cash,credit Accounts Receivable.
B)Debit Cash,credit Revenue.
C)Debit Accounts Receivable,credit Revenue.
D)Debit Accounts Receivable,credit Cash.

Question

Quizplus · Accepted Answer

When a company collects cash from a customer on account, it means the customer is paying off an existing balance that was previously recorded as Accounts Receivable. Therefore, the company should debit Cash to increase its cash balance and credit Accounts Receivable to decrease the balance owed by the customer, reflecting the payment received.

Cansing Company Collected $5,000 from a Customer on Account