Terms in this set (45) When a company provides services on account, which of the following accounts is debited?
Accounts Receivable
.
Which of the following accounts has a debit balance?
Accounts that normally have a debit balance include
assets, expenses, and losses
. Examples of these accounts are the cash, accounts receivable, prepaid expenses, fixed assets (asset) account, wages (expense) and loss on sale of assets (loss) account.
When a business provides services to a customer and the customer promises to pay later this is referred to as?
When a business provides services to a customer, and the customer promises to pay later, this is referred to as.
credit sales
.
Which accounts are affected when the company provides services to a cash customer?
Explanation: Providing services for cash
increases assets (cash) and increases revenue
, which increases net income and equity.
When a specific account receivable is written off the entry?
When a specific customer’s account is identified as uncollectible, the journal entry to write off the account is:
A credit to Accounts Receivable
(to remove the amount that will not be collected) A debit to Allowance for Doubtful Accounts (to reduce the Allowance balance that was previously established)
What is debit balance in cash book?
The debit balance as per the cash book means
the balance of deposits held at the bank
. Such a balance will be a credit balance as per the passbook. Such a balance exists when the deposits made by the firm are more than its withdrawals.
What are examples of expense accounts?
Some common expense accounts are:
Cost of sales, utilities expense, discount allowed, cleaning expense, depreciation expense, delivery expense, income tax expense
, insurance expense, interest expense, advertising expense, promotion expense, repairs expense, maintenance expense, rent expense, salaries and wages expense, …
What is account receivable example?
An example of accounts receivable includes
an electric company that bills its clients after the clients received the electricity
. The electric company records an account receivable for unpaid invoices as it waits for its customers to pay their bills.
Is Account Receivable a credit or debit?
The amount of accounts receivable is increased on the
debit side
and decreased on the credit side. When cash payment is received from the debtor, cash is increased and the accounts receivable is decreased. When recording the transaction, cash is debited, and accounts receivable are credited.
What is accounts receivable vs payable?
Put simply, accounts payable and accounts receivable are two sides of the same coin. Whereas accounts payable represents money that your business owes to suppliers,
accounts receivable represents money owed to your business by customers
.
When a company provides services for which cash will not be received?
When a company provides services for which cash will not be received until some future date, the company should
record the amount charged as accounts receivable
. A transaction that decreases a liability and increases an asset must also affect one or more other accounts.
What is ending owner’s equity?
Ending Owner’s Equity. =
Beginning Owner’s Equity + Investment by Owner + Net Income
. Net Income = Revenues – Expenses + Gains – Losses. Ending Owner’s Equity. = Beginning Owner’s Equity + Investment by Owner.
Which item’s is are reported on the balance sheet?
The items which are generally present in all the Balance sheet includes
Assets like Cash, inventory, accounts receivable, investments, prepaid expenses, and fixed assets
; liabilities like long-term debt, short-term debt, Accounts payable, Allowance for the Doubtful Accounts, accrued and liabilities taxes payable; and …
What happens when you write-off an accounts receivable?
When the company writes off accounts receivable, such accounts will need to be removed from the balance sheet. Usually, a write-off will
reduce the balance of accounts receivable together with the allowance for doubtful accounts
.
What happens when accounts receivable are not collected?
As we stated above, the
account Allowance for Doubtful Accounts
is a contra asset account containing the estimated amount of the accounts receivable that will not be collected. … Gem’s Bad Debts Expense will report credit losses of $2,000 on its June income statement.
How do you write down accounts receivable?
In the direct write-off method, when after a few years of trying to recover the amount the invoice is declared as bad or uncollectible, it is directly written off or expensed out in the income statement by
debiting
bad debt expense and crediting accounts receivable.
