Question

A company performs $10,000 of services and issues an invoice to the customer using the accrual method what’s the correct entry to record the transaction?

Answer 1

Based on the accrual method, the correct entry for $10,000 worth of services would be a debit to accounts receivable for $10,000 and a credit to Sales revenue for $10,000.

Why is this the correct entry?

The company has performed a certain service for a customer and hasn't been paid for it. The customer therefore owes the company which makes them an account receivable.

The $10,000 will be considered revenue by the company so they will credit the revenue account. Accounts Receivables are assets so this account will be debited.

Find out more on accounts receivables at brainly.com/question/24871345.