When a sale is made on account, how is the customer's account recorded?

When a sale is made on account, the customer's account is recorded by debiting it. In accounting, when a sale is made on credit, it signifies that the company has provided goods or services to the customer while allowing them a period to pay for that purchase later. This creates an accounts receivable on the company's books, which represents money that is owed by customers.

By debiting the customer's account, you are increasing the accounts receivable balance, which indicates that the customer now has an obligation to pay the business. This transaction also necessitates a corresponding credit to the sales revenue account, reflecting that sales have occurred and revenue has been earned.

Other options, such as crediting the account, would imply that the amount owed by the customer is decreasing, which does not align with the nature of sales on account. Similarly, stating that the account is not affected would inaccurately represent the increase in receivables. Transferring the account is also not applicable in this context, as it does not accurately describe the accounting process involved during a sale on account. Thus, debiting the customer’s account during a sale on credit is the correct and logical approach in accounting practices.