Credit sales are recorded as:

Question

Quizplus · Accepted Answer

Credit sales means that the company has provided a service or sold a product on credit, which results in an increase in accounts receivable (an asset account) and revenue. Therefore, the correct entry would be to debit accounts receivable and credit service revenue. Option A is incorrect because it shows a decrease in cash (an asset) and the creation of a liability account for deferred revenue, which is not applicable in this case. Option B is incorrect because it incorrectly shows a decrease in accounts receivable instead of an increase. Option C is incorrect because it shows a decrease in cash instead of an increase in accounts receivable.

Credit Sales Are Recorded As