The business provided services to a cash customer. To record this,
A) an asset is debited and a liability is credited.
B) an asset is debited and a revenue is credited.
C) an expense is debited and Capital is credited.
D) None of these are correct.

Question

Quizplus · Accepted Answer

When a business provides services to a cash customer, the business receives cash (an asset) and earns revenue. Therefore, an asset is debited (increased) and revenue is credited (increased). Option A is incorrect because there is no liability involved in this transaction. Option C is incorrect because there is no expense incurred in providing the services in this transaction. Option D is incorrect because there is a correct answer, which is B.

The Business Provided Services to a Cash Customer