Question

Businesses usually process customer payments by recording the amount of cash receipts and reducing the amount of

A. accounts receivable.
B. capital expenditures.
C. accounts payable.
D. sales expenses.

Answer 1

Businesses process customer payments by recording cash receipts and reducing accounts receivable, which represents money owed by customers for goods or services.

Step-by-step explanation:

When businesses process customer payments, they usually record the cash receipts and correspondingly reduce the amount of accounts receivable. Accounts receivable represent the money that customers owe to the company for products or services that have been delivered or used but not yet paid for. This accounting practice reflects the collection of cash, indicating that the customer's obligation to the company has been fulfilled and the business's claim to the funds is settled.