The accounting entry when income is earned on credit is which of the following?

Question

Quizplus · Accepted Answer

When income is earned on credit, it means that the company has provided goods or services to a customer and the customer has not yet paid for it. Therefore, the company will record an increase in its accounts receivable (what the customer owes) and an increase in income (what the company has earned). The correct accounting entry is to debit accounts receivable (an asset account) to increase it and credit income (a revenue account) to increase it.

The Accounting Entry When Income Is Earned on Credit Is