Antonio's catered a reception. The total price was $850. Their customer paid half of the fee in cash and agreed to pay the remainder later. The journal entry to record this transaction is
A) Cash 425
Accounts Receivable 425
Catering Service Fees 850
B) Cash 850
Accounts Receivable 850
C) Cash 850
Catering Service Fees 850
D) Accounts Receivable 850
Cash 425
Catering Service Fees 425

Question

Antonio's catered a reception. The total price was $850. Their customer paid half of the fee in cash and agreed to pay the remainder later. The journal entry to record this transaction is
A) Cash    425 
Accounts Receivable    425
Catering Service Fees    850
B) Cash    850 
Accounts Receivable    850
C) Cash    850 
Catering Service Fees    850
D) Accounts  Receivable   850 
Cash   425
Catering Service Fees    425

Quizplus · Accepted Answer

Choice A correctly records the transaction by showing the cash received as well as the accounts receivable created for the remaining balance. The catering service fees are also recorded for the total amount of $850. Choice B records the full amount as cash and accounts receivable, which is incorrect since only half of the fee was paid in cash. Choice C records only the cash received and not the accounts receivable created, which is incorrect since the customer agreed to pay the remainder later. Choice D records the accounts receivable for the full amount instead of only for the remaining balance, which is incorrect.

Antonio's Catered a Reception