Which of the following asset accounts is increased when a receivable is collected? a. Accounts Payable b. Supplies c. Cash d. Accounts Receivable

Question

Business

Bailey Turner

26 October, 17:56

Which of the following asset accounts is increased when a receivable is collected? a. Accounts Payable b. Supplies c. Cash d. Accounts Receivable

+2

Answers (1)

Know the Answer?

Roselyn Chen · Answer 1

(C) Cash

Explanation:

Receivables means deptors. These are obligations that has been honoured and value given, but you're yet to get cash. Receivables are seen as such. So the things you've given value to and you're yet to receive cash or payment for are receivables.

So when receivables are collected, then the asset account Cash is increased.

On the Delivery of goods or Services, the company debits Accounts Receivable and credits what is known as Sales Revenues or Service Revenues. When an account receivable is collected say 30 days later, the account receivables is reduced and the Cash or bank account is increased.