ICAEW AF · Chapter 3 · Question 3 of 11
A business sells goods on credit to a customer for £1,800. The business is not registered for sales tax. What is the double entry to record the sale?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Debit Trade receivables £1,800, Credit Revenue £1,800
Explanation
A credit sale creates an asset, the amount owed by the customer, so trade receivables are debited. Income is recorded by crediting revenue. Cash is only affected when the customer pays, at which point cash is debited and trade receivables credited.
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