Question

a journal entry that debits cash and credits accounts receivable indicates that: a. revenue decreased. b. payment was received on account. c. payment was made on account. d. revenue increased.

Explanation:

In accounting, debiting Cash increases the cash - balance and crediting Accounts Receivable reduces the amount owed to the company. This occurs when a customer pays an outstanding invoice, i.e., a payment is received on account. Revenue is recognized when the sale is made, not when the cash is collected for an already - recognized sale. A payment made on account would involve debiting Accounts Payable and crediting Cash.

Answer:

B. payment was received on account.