In a transaction where a company sells $4,000 on credit and later collects, what amount is debited to Accounts Receivable?

In a transaction where a company sells $4,000 on credit and later collects, what amount is debited to Accounts Receivable?

• A. $2,000
• B. $4,000
• C. $6,000
• D. $8,000

Answer: (B)

Accounts Receivable is an asset that increases with a debit when you record a sale on credit. In this case, the sale creates a receivable of 4,000, so you debit Accounts Receivable for 4,000. Later, when cash is collected, you debit Cash and credit Accounts Receivable for the amount collected, which reduces the receivable but does not add another debit to Accounts Receivable. So the amount initially debited to Accounts Receivable is 4,000. The other numbers would imply different sale or collection amounts and don’t fit this scenario.

Accounts Receivable is an asset that increases with a debit when you record a sale on credit. In this case, the sale creates a receivable of 4,000, so you debit Accounts Receivable for 4,000. Later, when cash is collected, you debit Cash and credit Accounts Receivable for the amount collected, which reduces the receivable but does not add another debit to Accounts Receivable. So the amount initially debited to Accounts Receivable is 4,000. The other numbers would imply different sale or collection amounts and don’t fit this scenario.