Question

Westwood supply services received $1,000 cash from a customer; the amount was owed to the business from the previous month. which of the following accounts will decrease as a result of this transaction?

-revenue
-accounts payable
-accounts receivable
-cash

Answer 1

The receipt of $1,000 cash from a customer will decrease the Accounts Receivable account since it represents the money owed to the business which is now being paid.

Step-by-step explanation:

When Westwood Supply Services received $1,000 cash from a customer, which was an amount owed from the previous month, this transaction will decrease the Accounts Receivable account. This is because Accounts Receivable represents the money owed by customers to the business, and when the customer pays, the account's balance is reduced. The cash account will increase by the corresponding amount, reflecting the receipt of cash. The revenue account will not change because the revenue was recognized when the service was provided originally, not when the cash was received. Accounts payable also will not decrease, as that account relates to the business's obligations to its suppliers, not its customers.