A company provided $12,000 of consulting services,and was immediately paid in cash by the customer.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) $\begin{array}{|l|r|l|}
\hline \text { Accounts receivable } & 12,000 & \
\hline \text { Consulting services revenue } & & 12,000 \
\hline
\end{array}$

Question

Quizplus · Accepted Answer

The correct journal entry for receiving cash immediately upon providing services is to debit Cash (to increase the asset account) and credit Consulting Services Revenue (to increase the revenue account). This reflects the increase in assets (cash) and the recognition of earned revenue.

A Company Provided $12,000 of Consulting Services,and Was Immediately Paid 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,and Was Immediately Paid $\begin{array}{|l|r|r|}\hline \text { Accounts receivable } & 12,000 & \\\hline \text { Cash } & & 12,000 \\\hline\end{array}$