On July 7, 2015, Hidden Camera Enterprises performed cash services of $1,700. The entry to record this transaction would include
A)a debit to Service Revenue of $1,700.
B)a credit to Accounts Receivable of $1,700.
C)a debit to Cash of $1,700.
D)a credit to Accounts Payable of $1,700.

Question

Quizplus · Accepted Answer

Since Hidden Camera Enterprises performed cash services, the transaction involves cash. Therefore, there would be a debit to Cash for $1,700 to reflect an increase in cash. Option A is incorrect because Service Revenue is a revenue account, and the transaction does not involve any credit, so it cannot be credited. Option B is incorrect because Accounts Receivable is an asset account that would be debited if Hidden Camera Enterprises had performed services on credit (i.e., when payment will be made at a later date), but that is not the case here. Option D is incorrect because Accounts Payable is a liability account that would be credited if Hidden Camera Enterprises had purchased goods or services on credit (i.e., when payment will be made at a later date), which is also not the case here.

On July 7, 2015, Hidden Camera Enterprises Performed Cash Services