CSLB Contractor's Law & Business Practice Exam

Which action would have no effect on accounts receivable balances?

1. Posting to the wrong accounts-receivable account

2. Debiting instead of crediting the accounts-receivable account

3. Crediting instead of debiting the accounts-receivable account

4. Transferring a receivable to an accounts-payable account

The correct answer is: Posting to the wrong accounts-receivable account

When considering actions that would have no effect on accounts receivable balances, transferring a receivable to an accounts-payable account stands out. This action effectively moves the amount from one category of the balance sheet to another. When a receivable is recorded, it reflects money expected to be received from customers. By transferring it to accounts payable, it indicates an obligation to pay rather than to receive, which does not alter the accounts receivable balance itself. In contrast, posting to the wrong accounts-receivable account would misallocate the balance without changing the overall receivable total, which could lead to inaccuracies in financial reporting. Debiting instead of crediting the accounts-receivable account impacts the balance, as these two actions affect the overall total by either increasing or decreasing it incorrectly. Similarly, crediting instead of debiting would also lead to a change in the balance that reflects an incorrect financial position, indicating that some funds are owed when in reality they may have been received instead. Therefore, transferring a receivable to accounts payable is the action that would not influence the accounts receivable balances, as it represents a mere reclassification rather than a direct change in the receivables themselves.