Kincaid Company provided consulting service of $2,500 to a customer who paid $1,300 and promised to pay the remainder next month.Which of the following journal entries correctly records this transaction?

Question

Quizplus · Accepted Answer

The journal entry should record the consulting revenue and accounts receivable initially recognized, as well as the cash received. Therefore, option B is correct because it records the consulting revenue and accounts receivable recognized and the cash received. Option A is incorrect because it only records the consulting revenue recognized without accounts receivable and cash received. Option C is incorrect because it only records the accounts receivable recognized without consulting revenue and cash received. Option D is incorrect because it records the consulting revenue and accounts receivable recognized, but also includes an incorrect credit entry for cash since the full amount has not been received yet.

Kincaid Company Provided Consulting Service of $2,500 to a Customer