Asked by Diamondz R-blissful on Jul 16, 2024
Verified
If a customer owes interest on accounts receivable,Interest Receivable is debited and Accounts Receivable is credited.
Interest Receivable
An accounting term for interest income that is earned but not yet received in cash.
Accounts Receivable
The money owed to a business by its customers for goods or services that have been delivered but not yet paid for.
- Understand the methods for recording and managing transactions related to accounts receivable, such as factoring, sales on credit, and employing promissory notes.
Verified Answer
MM
mohit mehtaJul 17, 2024
Final Answer :
False
Explanation :
Interest Receivable should be credited because it increases the company's assets, and Accounts Receivable should not be credited; instead, Interest Income should be credited to reflect the income earned from the interest.
Learning Objectives
- Understand the methods for recording and managing transactions related to accounts receivable, such as factoring, sales on credit, and employing promissory notes.
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