Question

Accounts receivable are the result of cash and credit sales.
True Or False

Answer 1

False. Accounts receivable are the result of credit sales, not cash sales. Credit sales allow customers to make purchases on credit and pay at a later date.

Step-by-step explanation:

False.

Accounts receivable are the result of credit sales, not cash sales. When a customer makes a purchase on credit, they are allowed to take the goods or services immediately and make the payment at a later date. This creates an account receivable, which is an unpaid amount owed by the customer.

Credit sales are a common practice in business, as it allows customers to make purchases without having to pay immediately. However, it also means that the business is taking a risk, as there is a possibility that the customer may not make the payment.