A business performed $8,000 of services. Their customer paid $3,000 of the amount right away but Charged the remaining amount. To record this transaction, the business would: A)Debit Cash $3,000 and Debit Accounts Receivable $5,000 and Credit Fees Income $8,000 B)Debit Accounts Receivable $8,000 and; Credit Fees Income $8,000 C)Debit Cash $3,000; Credit Fees Income $3,000 D)Debit Cash $3,000 and Debit Accounts Payable $5,000; Credit Fees Income $8,000

Question

Quizplus · Accepted Answer

The business performed services worth $8,000 but received only $3,000 in cash. The remaining $5,000 is charged and will be received later. To account for this transaction, we will debit Cash $3,000 because that's the amount received in cash, and we will also debit Accounts Receivable $5,000 because that's the amount that's still due from the customer. We will credit Fees Income $8,000 because that's the amount earned by the business for performing services. Therefore, the correct option is A.

A Business Performed $8,000 of Services