Use the five transactions for Hennigan Company described below to answer the question(s) that follow(s). Dec 1 Hennigan purchases two new saws on credit at $\$ 375$ each. The saws are added to Hennigan's rental inventory. Payment is due in 30 days.
8 Hennigan accepts advance deposits for to ol Company of $\$ 75$.
15 Hennigan receives a bill from Farmer's Electric Company for $\$ 150$. Payment is due in 30 days.
20 Customers are charged $\$ 750$ by Hennigan for tool Company. Payment is due from the customers in 30 days.
31 Hennigan receives $\$ 500$ in payments from the customers that were billed for Company on December 20.
-Refer to the transactions for Hennigan Rentals. Based on the October 31 transaction, Hennigan will record which of the following in its accounting records?
A) a credit in Accounts Payable for $500.
B) a credit in Accounts Receivable for $500.
C) a debit in Accounts Payable for $500.
D) a debit in Accounts Receivable for $500.

Question

Quizplus · Accepted Answer

On December 31, Hennigan receives $500 from customers, which reduces the amount owed by them. This is recorded as a credit in Accounts Receivable.

Use the Five Transactions for Hennigan Company Described Below to Answer