A company will debit Accounts Receivable while recording a credit sale at the time of the transaction.
To record a credit sale, you debit the customer receivables account and credit the sales revenue account. The journal entry would debit the accounts payable and credit the inventory. The double-entry recordkeeping system guarantees the precision of financial records by recording each transaction twice. Since the offsetting side of the journal entry is a debit - usually to the cash or accounts receivable account - sales are recorded as a credit. In essentially, the debit rises one of the current assets, while the credit grows the equity of the shareholders.
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