Smith Technical Services is working on a six- month job for a client, starting 1 February. They will collect $48 000 from their customer when the job is finished. On 1 March, their Accounts receivable account has a debit balance of $8 000. At the end of March, after monthly adjusting entries have been made, what will the balance in Accounts receivable be?
A)Credit balance of $8 000
B)Debit balance of $12 000
C)Debit balance of $16 000
D)Debit balance of $48 000

Question

Quizplus · Accepted Answer

The initial debit balance of $8,000 in Accounts Receivable represents the revenue recognized for February. By the end of March, another month's revenue of $8,000 is recognized, increasing the balance to a debit of $16,000.

Smith Technical Services Is Working on a Six- Month Job