Which of the following statements is correct?
A)When a future expense is paid in advance, the payment is normally recorded in a liability account called Prepaid Expense.
B)Promises of future payment by the buyer are called accounts receivable.
C)Increases and decreases in cash are always recorded in the owner's capital account.
D)An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business.
E)Accrued liabilities include accounts receivable.

Question

Quizplus · Accepted Answer

Promises of future payment by the buyer are called accounts receivable. This is the correct definition of accounts receivable, which represents money owed to a company by its customers for goods or services delivered on credit.

Which of the Following Statements Is Correct