When a company performs a service but has not yet received payment, it
A)debits Service Revenue and credits Accounts Receivable.
B)debits Accounts Receivable and credits Service Revenue.
C)debits Service Revenue and credits Accounts Payable.
D)makes no entry until cash is received.

Question

Quizplus · Accepted Answer

When a company performs a service and has not yet received payment, it records the transaction by debiting Accounts Receivable (an asset account) to reflect the amount owed by the customer and credits Service Revenue (a revenue account) to recognize the revenue earned.

When a Company Performs a Service but Has Not Yet