The business provided services to a credit customer.To record this:
A)an asset is debited and a liability is credited.
B)an asset is debited and a revenue is credited.
C)an expense is debited and Capital is credited.
D)None of these is correct.

Question

Quizplus · Accepted Answer

When a business provides services to a credit customer, it earns revenue for the services provided. Therefore, an asset (Accounts Receivable) is debited, and a revenue account (Service Revenue) is credited. Option A is incorrect because a liability (Accounts Payable) would be credited if the business purchased goods or services on credit from a supplier. Option C is incorrect because Capital would be credited if the owner invested personal funds into the business. Option D is incorrect because one of the options is correct.

The Business Provided Services to a Credit Customer