Question

A company made the following journal entry: Cash 5,000 Accounts Receivable 5,000 This journal entry reflects which of the following transactions? Earning a revenue and will receive the amount from the customerat a future date. The payment of an account. Investment of cash in the business by the owner. The collection of an account.

Answer 1

The answer is: The collection of an account.

Step-by-step explanation:

Both cash and accounts receivable are asset accounts. When an asset account is debited it means it increases (cash increased by $5,000). When an asset account is credited, it means it decreases (accounts receivable decreased by $5,000).

So if accounts receivable decreased and cash increased, it means that an account was collected.