A client has a massage and asks the company bookkeeper to mail her the bill. The bookkeeper should make which entry to record the invoice?
A) no entry until the cash is received
B) Fees Earned, debit; Accounts Receivable, credit
C) Cash, debit; Fees Earned, credit
D) Accounts Receivable, debit; Fees Earned, credit

Question

Quizplus · Accepted Answer

This transaction represents the sale of a service on credit, so the appropriate entry is to debit Accounts Receivable (an asset account) and credit Fees Earned (a revenue account). The bookkeeper should not debit or credit Cash (unless payment has been received) and should not wait until payment is received to record the transaction.

A Client Has a Massage and Asks the Company Bookkeeper