Question

which of the following statements is not true:

A. Accounts receivable are increased by customer payments;

B. Accounts Receivable are held by a seller;

C. Accounts receivable are classified as assets;

D. Accounts receivable are increased by billings to customers;

E. Accounts receivable arise from credit sales

Answer 1

The correct answer is :

A. Accounts receivable are increased by customer payments

Note :

1.When customer payments are received, accounts receivable is decreased. Further, if Customer payments are made, accounts payables are decreased.

2.  Accounts Receivable are held by a seller is true because the seller has provided the goods or services to the buyer and hence the amount is receivable by the seller.

3. Accounts receivable are classified as assets is true as these are current assets and is receivable by the seller.

4.  Accounts receivable are increased by billings to customers is true as when the billings to customers is increased, the amount receivable by the seller also increases.

5. Accounts receivable arise from credit sales is true as payments for sales given on credit are to be received in the future by the seller.