You have just posted an A/R invoice based on a delivery. What Is the effect on accounting? Note: There are 2 correct answers to this question.

Question

Options

• AA credit to sales revenue account
• BA credit to cost of goods sold account
• CA debit to customer account
• DA debit to a sales revenue account

• A
  88% (23)
• B
  4% (1)
• D
  8% (2)

Explanation

Posting an A/R invoice records the revenue side of a sale: you debit the customer account (C) because the customer now owes you money - increasing Accounts Receivable as an asset - and you credit the sales revenue account (A) because revenue has been earned. Option B is wrong because Cost of Goods Sold is debited (not credited) when recognizing an expense, and that entry typically occurs at goods issue/delivery, not at invoicing. Option D is wrong because revenue accounts are always credited when earned; debiting sales revenue would reduce it, which is the opposite of what a sale does.

Memory tip: Think "DEAD CLIC" - Debits increase Expenses, Assets, Dividends; Credits increase Liabilities, Income (revenue), and Capital. An invoice creates an Asset (A/R → debit) and Income (Revenue → credit), so A and C are the only options that follow this rule.

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