The accounting entry when income is earned on credit is:

Question

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When income is earned on credit, it means the company has made a sale on credit, and the customer owes them money. This is recorded by debiting the accounts receivable account (the amount the customer owes) and crediting the income account (the revenue earned from the sale). Option A is incorrect because there is no cash involved yet. Option C is incorrect because accounts payable refers to money owed by the company to its suppliers, not to money owed to the company. Option D is incorrect because you can't credit income and debit accounts receivable at the same time.

The Accounting Entry When Income Is Earned on Credit Is