Question

A review of the taxes receivable subsidiary ledger indicates that $25,000 would probably be received more than 60 days after the fiscal year end. The appropriate journal entry will include

a. A debit to revenues control
b. A debit to deferred inflows - property taxes
c. A credit to cash
d. A credit to taxes receivable

Answer 1

The appropriate journal entry will include a credit to cash.

Step-by-step explanation:

The appropriate journal entry will include a credit to cash because the taxes receivable are expected to be received more than 60 days after the fiscal year end. When a revenue is not collected within the fiscal year, it is recorded as a decrease in cash because it represents an amount that will not be received in the near term.

The entry would be: Debit Taxes Receivable and Credit Cash for $25,000.