Question

The accounts receivable system typically used by utilities is the:

a. pre-billing system
b. open-item system
c. balance-forward system
d. post-billing system

Answer 1

The accounts receivable system typically used by utilities is the balance-forward system. It allows customers to see a running balance of their account and make payments accordingly.

Step-by-step explanation:

The accounts receivable system typically used by utilities is the balance-forward system. In this system, the utility company sends out bills to customers on a regular basis, typically monthly. The bill includes the balance from the previous month along with any new charges incurred during the current billing period.

For example, let's say a customer receives their first bill from a utility company. The bill will show the outstanding balance from the previous month, such as $100. It will also show the current charges for the current month, such as $50. The total amount due would be $150, which is the balance from the previous month plus the new charges.

This system allows customers to see a running balance of their account and make payments accordingly. It is commonly used by utility companies to track and collect payments from customers.