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If a customer doesn't pay at the time of sale, it means that....

A. It does not have to be recorded
B. It is never an accounts receivable
C. An accounts receivable is always created
D. A and B

1 Answer

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Answer: C. An accounts receivable is always created.

The basic idea behind Accounts Receivable is based on its name. Accounts Receivable is the money you have earned, but which has not yet been received ( it's not "cash in hand" yet). It means you have already provided a service or delivered a product to the customer (cash outflow), but have not yet received your payment (cash inflow). If a customer doesn't pay at the time of sale, it means that an accounts receivable should be created.

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