Question

During the month of May, a company performed $2,400 of cash services and $3,300 of services on account. The journal entry at the end of the month to record this transaction would include a:

Answer 1

Answer:

Debit : Cash  $2,400

Debit : Account Receivables $3,300

Credit : Revenue $5,700

Explanation:

Revenue is recognized when a firm transfers the control of goods or services not when paid.

So this journal must both recognize the Assets in Cash and Assets in Trade Receivables since control for the services has already been transferred.

The journal entry at the end of the month to record this transaction would be :

Debit : Cash  $2,400

Debit : Account Receivables $3,300

Credit : Revenue $5,700