A customer owes \$1,200 but pays only \$700. How should the company adjust its accounts receivable?

• A. Debit Cash \$700; Credit Revenue \$700.
• B. Debit Cash \$1,200; Credit Accounts Receivable \$1,200.
• C. Debit Accounts Receivable \$700; Credit Cash \$700. Remaining balance in Accounts Receivable is \$500.
• D. Debit Cash \$700; Credit Accounts Receivable \$700. Remaining balance in Accounts Receivable is \$500.

Answer: (D)