Received cash on account from Scott Company. What is the correct entry?

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Multiple Choice

Received cash on account from Scott Company. What is the correct entry?

Explanation:
When you receive cash on an account receivable, you’re turning a customer’s promise into actual cash. This increases your cash balance (debit Cash) and decreases the amount the customer owes you (credit Accounts Receivable). Revenue isn’t affected because the sale was recorded when it occurred, not when the cash is collected. So the proper entry is Debit Cash and Credit Accounts Receivable.

When you receive cash on an account receivable, you’re turning a customer’s promise into actual cash. This increases your cash balance (debit Cash) and decreases the amount the customer owes you (credit Accounts Receivable). Revenue isn’t affected because the sale was recorded when it occurred, not when the cash is collected. So the proper entry is Debit Cash and Credit Accounts Receivable.

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