Broadmor Industries collected $7,500 from a customer on account.What journal entry will be prepared by Broadmor to record this transaction?
A)Debit Cash and credit Accounts Receivable.
B)Debit Cash and credit Service Revenue.
C)Debit Accounts Receivable and credit Service Revenue.
D)Debit Accounts Receivable and credit Cash.

Question

Quizplus · Accepted Answer

The revenue was recognized when the services were performed and the right to collect the $7,500 from its customer was recorded as an increase to an asset called Accounts Receivable.The journal entry to record the receipt of a customer payment on account includes a debit to Cash and a credit to Accounts Receivable.

Broadmor Industries Collected $7,500 from a Customer on Account