Sebastian Belle, CPA, has billed clients for services performed.He subsequently receives payments from his clients.What entry will Sebastian make upon receipt of the payments?

Question

Quizplus · Accepted Answer

When Sebastian receives payments from his clients for services already billed, he should debit Cash (to increase the asset account for the cash received) and credit Accounts Receivable (to decrease the asset account because the client's obligation to pay has been fulfilled). This entry reflects the receipt of payment for services previously billed, not the recognition of new revenue or the adjustment of previously recognized revenue.

Sebastian Belle, CPA, Has Billed Clients for Services Performed