Question

In Waren's AIS, which of the following Sales and Cash Receipts (Revenue) Cycle transactions does not require an entry to update the Accounts Receivable Subsidiary Ledger?

Answer 1

In Waren's AIS, a cash sale transaction does not require an entry to update the Accounts Receivable Subsidiary Ledger.

Step-by-step explanation:

In the Sales and Cash Receipts (Revenue) Cycle of Waren's AIS (Accounting Information System), the transaction that does not require an entry to update the Accounts Receivable Subsidiary Ledger is a cash sale.

When a customer pays with cash at the time of purchase, there is no need to track the outstanding amount in the Accounts Receivable Subsidiary Ledger because no credit is extended. This transaction only affects the Cash account and the Sales Revenue account.

For example, if a customer buys a product for $100 and pays in cash at the time of purchase, the entry would be:

Cash +$100
Sales Revenue +$100