B Com Exam > B Com Questions > Which account is credited when cash is receiv...
Start Learning for Free
Which account is credited when cash is received from a customer?
- a)Customer A/c
- b)Cash A/c
- c)Supplier A/c
- d)Bank A/c
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Which account is credited when cash is received from a customer?a)Cust...
When cash is received from a customer, the account to be credited is Cash A/c. This is because cash is an asset (real account) and the receipt of cash increases the balance of the Cash A/c. The corresponding debit entry will be made in the account of the customer, which in this case would be Customer A/c.
View all questions of this test
Most Upvoted Answer
Which account is credited when cash is received from a customer?a)Cust...
When cash is received from a customer, the account that is credited is the Cash account.
Explanation:
When a business receives cash from a customer, it is considered a cash inflow. This means that the business is receiving money, which increases its cash balance. In accounting, cash is recorded as an asset, and any increase in the cash balance is recorded by crediting the Cash account.
The Cash account is a general ledger account that tracks the cash transactions of a business. It is part of the double-entry bookkeeping system, which means that every transaction has two sides - a debit and a credit. In this case, the cash inflow from the customer is recorded by crediting the Cash account.
Example:
Let's say a customer pays $500 in cash to a business for the purchase of goods. The journal entry to record this transaction would be as follows:
Cash A/c (Credit) $500
Accounts Receivable A/c (Debit) $500
In this example, the Cash account is credited with $500, indicating an increase in the cash balance. The corresponding debit entry is made to the Accounts Receivable account, which represents the amount owed to the business by the customer. This transaction reflects the transfer of funds from the customer to the business.
Impact on Financial Statements:
Crediting the Cash account has an impact on the financial statements of a business. It increases the cash balance on the balance sheet, which is a measure of the liquidity of the business. It also affects the income statement, as cash received from customers is considered revenue and increases the net income of the business.
Conclusion:
When cash is received from a customer, the Cash account is credited to reflect the increase in the cash balance. This transaction is part of the double-entry bookkeeping system and has an impact on the financial statements of a business.
Explanation:
When a business receives cash from a customer, it is considered a cash inflow. This means that the business is receiving money, which increases its cash balance. In accounting, cash is recorded as an asset, and any increase in the cash balance is recorded by crediting the Cash account.
The Cash account is a general ledger account that tracks the cash transactions of a business. It is part of the double-entry bookkeeping system, which means that every transaction has two sides - a debit and a credit. In this case, the cash inflow from the customer is recorded by crediting the Cash account.
Example:
Let's say a customer pays $500 in cash to a business for the purchase of goods. The journal entry to record this transaction would be as follows:
Cash A/c (Credit) $500
Accounts Receivable A/c (Debit) $500
In this example, the Cash account is credited with $500, indicating an increase in the cash balance. The corresponding debit entry is made to the Accounts Receivable account, which represents the amount owed to the business by the customer. This transaction reflects the transfer of funds from the customer to the business.
Impact on Financial Statements:
Crediting the Cash account has an impact on the financial statements of a business. It increases the cash balance on the balance sheet, which is a measure of the liquidity of the business. It also affects the income statement, as cash received from customers is considered revenue and increases the net income of the business.
Conclusion:
When cash is received from a customer, the Cash account is credited to reflect the increase in the cash balance. This transaction is part of the double-entry bookkeeping system and has an impact on the financial statements of a business.
Free Test
FREE
| Start Free Test |
Community Answer
Which account is credited when cash is received from a customer?a)Cust...
Correct option is A because when cash is received from any customer it transferred to cash a/c because cash is an real asset and the receipt of cash increases the balance of cash a/c
|
Explore Courses for B Com exam
|
|
Top Courses for B ComView all
Question Description
Which account is credited when cash is received from a customer?a)Customer A/cb)Cash A/cc)Supplier A/cd)Bank A/cCorrect answer is option 'A'. Can you explain this answer? for B Com 2025 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Which account is credited when cash is received from a customer?a)Customer A/cb)Cash A/cc)Supplier A/cd)Bank A/cCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for B Com 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which account is credited when cash is received from a customer?a)Customer A/cb)Cash A/cc)Supplier A/cd)Bank A/cCorrect answer is option 'A'. Can you explain this answer?.
Which account is credited when cash is received from a customer?a)Customer A/cb)Cash A/cc)Supplier A/cd)Bank A/cCorrect answer is option 'A'. Can you explain this answer? for B Com 2025 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Which account is credited when cash is received from a customer?a)Customer A/cb)Cash A/cc)Supplier A/cd)Bank A/cCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for B Com 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which account is credited when cash is received from a customer?a)Customer A/cb)Cash A/cc)Supplier A/cd)Bank A/cCorrect answer is option 'A'. Can you explain this answer?.
Solutions for Which account is credited when cash is received from a customer?a)Customer A/cb)Cash A/cc)Supplier A/cd)Bank A/cCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for B Com.
Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free.
Here you can find the meaning of Which account is credited when cash is received from a customer?a)Customer A/cb)Cash A/cc)Supplier A/cd)Bank A/cCorrect answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Which account is credited when cash is received from a customer?a)Customer A/cb)Cash A/cc)Supplier A/cd)Bank A/cCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for Which account is credited when cash is received from a customer?a)Customer A/cb)Cash A/cc)Supplier A/cd)Bank A/cCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of Which account is credited when cash is received from a customer?a)Customer A/cb)Cash A/cc)Supplier A/cd)Bank A/cCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Which account is credited when cash is received from a customer?a)Customer A/cb)Cash A/cc)Supplier A/cd)Bank A/cCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice B Com tests.
|
|
Explore Courses for B Com exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up
within 7 days!
within 7 days!
Takes less than 10 seconds to signup