If there is a separate sub-ledger account for every debtor and creditor, which of the following double-entries is the correct way to record money received from Peter Smith, who is a debtor to the business?
Select ONE answer:
- Account to Debit Peter Smith / Account to Credit Bank
- Account to Debit Bank / Account to Credit Peter Smith
- Account to Debit Bank / Account to Credit Cash
- Account to Debit Cash / Account to Credit Peter Smith
Show your workings to arrive at your answer, and explain and justify your reasons:
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This is multiple choice question is suitable for Accounting KS5 classes.
The answer is 2 – This is the correct double entry record when a firm receives money from one of its debtors for an unpaid invoice.
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