A company provided $12,000 of consulting services to a customer on account.The customer promises payment in 30 days.Identify the journal entry below that properly records this transaction.
A) $\begin{array}{|l|r|r|}
\hline \text { Accounts receivable } & 12,000 & \
\hline \text { Cash } & & 12,000 \
\hline
\end{array}$
B) $\begin{array}{|l|r|l|}
\hline \text { Cash } & 12,000 & \
\hline \text { Consulting services revenue } & & 12,000 \
\hline
\end{array}$
C) $\begin{array}{|l|r|r|}
\hline \text { Consulting services revenue } & 12,000 & \
\hline \text { Cash } & & 12,000 \
\hline
\end{array}$
D) $\begin{array}{|l|r|l|}
\hline \text { Accounts payable } & 12,000 & \
\hline \text { Consulting services revenue } & & 12,000 \
\hline
\end{array}$
E) $\begin{array}{|l|r|r|}
\hline \text { Accounts Receivable } & 12,000 & \
\hline \text { Consulting services revenue } & & 12,000 \
\hline
\end{array}$

Question

Quizplus · Accepted Answer

The correct journal entry for providing services on account (meaning the customer will pay later) involves debiting Accounts Receivable (to record the amount the customer owes the company) and crediting Consulting Services Revenue (to record the income earned from providing the services). This is accurately reflected in option E.

A Company Provided $12,000 of Consulting Services to a Customer Accounts receivable 12,000 Cash 12,000\begin{array}{|l|r|r|}\hline \text { Accounts receivable } & 12,000 & \\\hline \text { Cash } & & 12,000 \\\hline\end{array} Accounts receivable Cash ​12,000​12,000​​

A Company Provided $12,000 of Consulting Services to a Customer $\begin{array}{|l|r|r|}\hline \text { Accounts receivable } & 12,000 & \\\hline \text { Cash } & & 12,000 \\\hline\end{array}$