Which account normally receives a debit when cash is received from a debtor?
Correct answer: B. The cash account
- A. The debtor's personal account
- B. The cash account
- C. The sales account
- D. The capital account
Explanation
Cash is an asset, so an increase in cash is recorded on the debit side of the Cash Account. The debtor's account is credited because the amount owed by that debtor decreases.
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About Ledger Accounts and the Trial Balance
Ledger accounts collect transactions under individual headings and use debit and credit sides to determine balances. The trial balance lists those balances to check arithmetical agreement before financial statements are prepared, but it does not reveal every error, such as complete omission, compensating errors or entries made in the wrong account.
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