A promise received from a business's customers to pay for goods and services that they received from the business is called a(n):
A) account receivable.
B) account payable.
C) revenue.
D) expense.

Question

Quizplus · Accepted Answer

An account receivable is a promise received from a business's customers to pay for goods and services that they received from the business. It is an asset on the balance sheet of the business because it represents money that is owed to the business by its customers. Option B (account payable) refers to a promise made by the business to pay for goods and services that it received from its suppliers. Option C (revenue) and option D (expense) refer to the income and expenses of the business, respectively.

A Promise Received from a Business's Customers to Pay for Goods