A company has accounts receivable when it purchases items on account. A. True B. False

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14-03-2019
Geography

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A company has accounts receivable when it purchases items on account. A. True B. False

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jennasysmcmeniman jennasysmcmeniman · Answer 1 · 2019-03-14T08:27:22+01:00

jennasysmcmeniman jennasysmcmeniman

14-03-2019

the correct answer would be A, TRUE. typically data is stored on consumers purchases when one creates an account, all logs are kept for future (if necessary) circumstances.

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sunmathisynergy sunmathisynergy · Answer 2 · 2019-08-23T12:56:40+02:00

Answer:

It is false that a company has accounts receivable when it purchases items on account. Whoever purchases will not be having the accounts receivable.

Explanation:

Accounts receivable is the payment which the company receives from its customers who have purchased the goods and services on credit. These are treated as assets on the balance sheet.

Let us consider an example as follows:

'A' be the manufacturer of cars. 'B' is the customer who ordered for 100 cars for 5,00,00,000.

Now an invoice will be generated for B and the credit period will be given for 30 days.

Now A will be having account receivable as B will be paying the amount before the expiry date or else late fine will be imposed. Therefore, whoever sells will have the accounts receivable.