Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 22 - No. 45)
What is the effect of a credit sale on the income statement and the balance sheet?
The income statement shows an increase in revenue.
The balance sheet shows an increase in assets (Accounts Receivable).
The income statement shows an increase in expenses.
The balance sheet shows a decrease in liabilities.
Explanation
A credit sale increases revenue (income statement) and the account receivables (balance sheet).
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