Question

1. What type of account is accounts receivable?

1. Revenue
2. Asset
3. Equity

2. An entry to post a vendor invoice debits Accounts Payable and credits an Expense account

1. True
2. False

3. When and why would it be appropriate to accrue an AP Invoice?

Complete the sentence using one phrase from both column A and column B

When _______________________________________________________ and

________________________________________________________________

Column A                                                            Column B

Goods are ordered Goods are received You are under budget Goods are shipped

an invoice has not been received for payment you have received an invoice you are under budget

                                       

4. The café has credit card sales of $1,000, and the processing fee payable to the credit card company is 2%. The cash register is linked directly to the credit card company. The cash is received immediately with a deduction taken for the fee.

Match the terms in column A with the appropriate items in column B to complete the journal entry

Column A

Cash

Credit Card Expense, Fee

Credit Card Sales

Column B

Debit: $20

Credit: $20

Debit: $980

Credit: $980

Debit: $1,000

Credit: $1,000

Answer 1

1) Accounts receivable is a:   (b) Asset.
This is because the Accounts receivable are the debtors who have to pay for products/services provided by us.
We have to receive the due amount from Accounts Receivable.
2) False
This is because correct entry is Debit the Expense account and Credit the Accounts Payable.
Vendor has raised invoice on us, so vendor is creditors and as per rule Credit the provider.
3) It is appropriate to accrue an AP invoice,
WHEN - Goods are received
WHY - Yor have received an invoice
4) Correct Matching:
Col A	ColB
Cash	Debit: $980	(because cash received after deduction of credit card fees)
Credit Card expense, Fee	Debit: $20	(credit card fee 2% on $1000)
Credit Card Sales	Credit: $1000	(total sales on credit card)