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Intermediate Accounting - Sale on Credit

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What accounts are affected when a company records a sale on credit? How is the balance sheet affected when a company records a sale on credit? How is the income statement affected when a company records a sale on credit?

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Solution Summary

Affected accounts, the balance sheet and income statement changes are explained when a company records a sale on credit.

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"What accounts are affected when a company records a sale on credit? "
- Account receivables.

"How is the balance sheet affected when a company records a sale on credit?"
- On a public company's balance sheet, accounts receivable is often recorded as an asset because this represents a legal obligation for the customer to remit cash for its short-term debts.
Total Current Assets in the balance sheet increases ...

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