James Wright performed handyman services for $2500. He received cash of $1500 with
The balance to be received within 28 days. Ignoring GST, the transaction is recorded as:

Question

Quizplus · Accepted Answer

This transaction represents a partial payment of the total amount due for handyman services. Therefore, we would record the $1500 cash received as a debit to Cash, and the remaining amount of $1000 as a debit to Accounts Receivable (since the customer still owes that amount). The total amount of the handyman services provided ($2500) would be recorded as a credit to Services Revenue. Option B is incorrect because it records the transaction as if the handyman owed money to a supplier or vendor (Accounts Payable), when in fact he is the service provider. Option C is incorrect because it only records the cash received, and does not account for the remaining amount due. Option D is incorrect because it records the transaction as a decrease in equity, which is not appropriate for this type of transaction.

James Wright Performed Handyman Services for $2500