Sunset Tours has a $3,500 account receivable from the Del Mar Rotary. On January 20, the Rotary makes a partial pay-ment of $2,100 to Sunset Tours. The journal entry made on January 20 by Sunset Tours to record this transactionincludes:a. A debit to the Cash Received account of $2,100.b. A credit to the Accounts Receivable account of $2,100.c. A debit to the Cash account of $1,400.d. A debit to the Accounts Receivable account of $1,400.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Sunset Tours has a $3,500 account receivable from the Del
Mar Rotary. On January 20, the Rotary makes a partial pay-
ment of $2,100 to Sunset Tours. The
on January 20 by Sunset Tours to record this transaction
includes:
a. A debit to the Cash Received account of $2,100.
b. A credit to the
c. A debit to the Cash account of $1,400.
d. A debit to the Accounts Receivable account of $1,400.
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