Question

Norbert Inc. delivered goods and services during December. Payment is expected during the first week of January. The related adjusting entry should consist of a debit to a(n) ____ account and a credit to a(n) _____ account.

Answer 1

Answer:

The correct word for the blank spaces are: asset; revenue.

Explanation:

By delivering goods expecting payment at a later date, Norbert Inc. is increasing its accounts receivable. This type of profit takes place when goods or services are provided in credit and the payment is set in the future. In the example, according to the Generally Accepted Accounting Principles (GAAP), the accounts receivable must be debited to an asset account and credited to a revenue account.