Question

In September, DK Company sells merchandise to Lions Company on credit. In October, Lions Company pays the balance in full. The entry to record the collection of cash by DK Company in October will include a _______ to Accounts Receivable

Answer 1

Credit

Step-by-step explanation:

Account receivable is the amount which a company will receive in the future. When the amount is received, cash is debited and account receivable is credit. Account receivable is credit; means there is a decrease in account receivables account. So, the entry to record a collection of cash by DK Company in October will include a credit in account receivable and debit in cash account.