A credit policy that is too lenient results in: A. increased sales volume accomp

Question

A credit policy that is too lenient results in:

A. increased sales volume accompanied by a low level of losses due to unpaid accounts receivable.

b. decreased sales volume accompanied by a low level of losses due to unpaid accounts receivable.

c. increased sales volume accompanied by a high level of losses due to unpaid accounts receivables.

d. decreased sales volume accompanied by a high level of losses due to unpaid accounts receivables.

The sales account is classified as a(n):

a. liability account.

b. asset account.

c. contra account.

d. revenue account.

To find out how much an individual customer owes you, you would look at the:

A. general journal.

b. Sales account in the general ledger.

c. Accounts Receivable subsidiary ledger.

d. Accounts Receivable account in the general ledger.

After all the journal entries have been posted, the total of the schedule of accounts receivable should equal the:

a. balance of the Sales account.

b. balance of the Accounts Payable account in the general ledger.

c. balance of the Accounts Receivable account in the general ledger.

d. the total of all sales on account for the accounting period.

Explanation / Answer

Answer A - Option c Increased sales volume accompanied by a high level of losses due to unpaid accounts receivables. Answer B - Option d revenue account Answer C - Option c Accounts Receivable subsidiary ledger Answer D - Option c balance of the Accounts Receivable account in the general ledger.

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