Selected accounts at July 31 are provided below:

-Refer to Hesson Properties. What journal entry is required to record the services provided to customers?

Question

Selected accounts at July 31 are provided below:
  
-Refer to Hesson Properties. What journal entry is required to record the services provided to customers?

Quizplus · Accepted Answer

The journal entry required to record services provided to customers is to debit Accounts Receivable for $1,500 and credit Service Revenue by the same amount. This is because services provided to customers have increased the company's Accounts Receivable balance (an asset account) and generated Service Revenue (a revenue account). Option B correctly reflects this. Option A incorrectly debits Cash and credits Accounts Receivable, which implies that the company received cash in exchange for its services, when in fact it has not yet received any cash. Option C debits Service Revenue and credits Cash, which would be the correct entry if the company received cash from customers but has not yet provided any services. Option D erroneously credits Accounts Payable, which would only be appropriate if the company had incurred a liability to a supplier but has not yet paid for it.

Selected Accounts at July 31 Are Provided Below