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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

Solutions

Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

When fees are earned and the customer promises to pay later, which account is debited?

(a) Cash

(b) Accounts Receivable

(c) Accounts Payable

(d) Capital

To determine

Identify the account that is to be debited when fees are earned and the customer promises to pay it later.

Explanation

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Ø  Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Ø  Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, and expenses.

DateAccounts title and explanation

Post.

Ref.

Debit

($)

Credit

($)

Accounts receivable  xxxx 
      Fees earned  

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