Question

At December 1, 2014, Cursive Company's accounts receivable balance was $1,200. During December, Cursive had credit revenues of $4,800 and collected accounts receivable of $4,000. At December 31, 2014, the accounts receivable balance is:___________
a) $400 debit.
b) $400 credit.
c) $2,000 debit.
d) $2,000 credit.

Answer 1

Answer:

The correct answer is C

Explanation:

Accounts receivable is the term of accounting, which is defined as the legally enforceable claims for the payment that is held through a business for the goods supplied as well as service rendered that the client have ordered but not paid.

Computing the balance of accounts receivable as:

Accounts receivable balance = Accounts receivable balance as on December 1, 2014 + (Credit revenue - Received revenue)

where

Accounts receivable balance as on December 1, 2014 is $1,200

Credit revenue is $4,800

Received revenue is $4,000

So, putting the values above:

Accounts receivable balance = $1,200 + ($4,800 - $4,000)

Accounts receivable balance = $1,200 + $800

Accounts receivable balance = $2,000

It is positive, so, it is debit balance