In the context of accounting functions,which of the following is true of accounts receivable?
A) It tracks what one owes and helps to make timely payments.
B) It is independent of the extension of credit.
C) It records all checks written and payments made.
D) It records provision of credit to customers.

Question

Quizplus · Accepted Answer

Accounts receivable tracks the money that is owed by customers who have received credit, therefore it records the provision of credit to customers. Option A is incorrect as it refers to accounts payable, which tracks what a company owes to its vendors. Option B is incorrect as accounts receivable is dependent on the extension of credit to customers. Option C is incorrect as it refers to the function of a bank account, not accounts receivable.

In the Context of Accounting Functions,which of the Following Is