Sky Co. collected $600 from one of its customers for payment on their account. The journal entry would include a:
A)debit to Accounts Receivable and a credit to Cash.
B)debit to Cash and a credit to Accounts Payable.
C)debit to Cash and a credit to Accounts Receivable.
D)debit to Cash and a credit to Sales Revenue.

Question

Quizplus · Accepted Answer

The transaction involves the collection of cash from a customer for payment on their account. This means that an Accounts Receivable will be credited, as the customer's obligation to pay has been settled. Conversely, the receipt of cash will be debited in the Cash account since it is a current asset that has increased as a result of the collection. Therefore, the journal entry will be a debit to Cash and a credit to Accounts Receivable.

Sky Co Collected $600 from One of Its Customers for Payment