B sold goods to A for $2 000.A paid his account one month later.What is the correct entry in B's books to record the payment by A? Ignore GST.

Question

Quizplus · Accepted Answer

As A has paid his account, B needs to debit the bank account and credit the accounts receivable account to record the payment. Option C is the correct entry for that. Option A is incorrect as it would only be the correct entry if A had paid at the time of purchase. Option B is incorrect because it would not represent the payment received from A. Option D is incorrect because it would incorrectly increase sales when the payment has been received for the previous sale.

B Sold Goods to a for $2 000