Seller's Accounting for Credit Sales

Steps:

• Identify As as the seller in a credit sale transaction.
• Recognize the effects: increases Accounts Receivable (asset) and Sales (revenue).
• Apply double-entry rule: debit Accounts Receivable for the asset increase.
• Credit Sales for the revenue recognition.

Why D is correct:

• D (2 and 4) matches the standard journal entry for credit sales: Debit Accounts Receivable (4), Credit Sales (2), per the double-entry accounting principle.

Why the others are wrong:

• A (1 and 4): Purchases (1) applies to the buyer, not the seller.
• B (3 and 4): Accounts Payable (3) is a buyer liability, irrelevant for the seller.
• C (2 and 3): Pairs Sales (2) with Accounts Payable (3), which mismatches seller's asset increase.

Final answer: D