Question

Fess Hardware Store had net credit sales of $8,500,000 and cost of goods sold of $5,000,000 for the year. The Accounts Receivable balances at the

Answer 1

$8,500,000

Step-by-step explanation:

When revenue is earned but cash is yet to be received,

Debit Accounts receivable

Credit Revenue account

When cash is received,

Debit Cash account

Credit Accounts receivable.

To account for the items sold, debit cost of goods sold and credit Inventory.

As such, the account receivables balance is same as the net credit sales.