A client has a massage and asks the company bookkeeper to mail her the bill. The bookkeeper should make which entry to record the invoice?
A) No entry until the cash is received
B) Fees Earned, debit; Accounts Receivable, credit
C) Cash, debit; Fees Earned, credit
D) Accounts Receivable, debit; Fees Earned, credit

Question

Quizplus · Accepted Answer

Since the client asks for the bill to be mailed to her, it means that the payment is expected to be made in the future. Therefore, the company should record the transaction as Accounts Receivable, debit, and Fees Earned, credit, indicating that the company has earned fees for the service provided but has not yet received payment for it. Option A is incorrect because it would not accurately reflect the accounts and transactions. Option B is incorrect because it would not record the fact that payment is expected to be made at a later time. Option C is incorrect because it records only the payment received, not the fees earned for the service provided.

A Client Has a Massage and Asks the Company Bookkeeper