Asked by Ferhat Butun on Apr 24, 2024
Verified
When a service has been performed, but no cash has been received, which of the following statements is true?
A) No journal entry is made.
B) The entry includes a debit to Accounts Payable.
C) The entry includes a credit to Deferred Revenue.
D) The entry includes a debit to Accounts Receivable.
Accounts Payable
Short-term liabilities or debts a company owes to its suppliers or creditors for goods and services received but not yet paid for.
Deferred Revenue
Income received by a company for goods or services yet to be delivered or performed, recognized as a liability on the balance sheet.
- Familiarize oneself with the basic tenets of journal entries and their repercussions on account balances.
Verified Answer
BS
Bonnie Smith6 days ago
Final Answer :
D
Explanation :
When a service has been performed but no cash has been received, the company has earned revenue on credit. Therefore, it records this transaction by debiting Accounts Receivable (to record the amount owed by the customer) and crediting a revenue account (to record the earned revenue). This reflects the increase in assets (Accounts Receivable) and the increase in equity (through earned revenue).
Learning Objectives
- Familiarize oneself with the basic tenets of journal entries and their repercussions on account balances.