When a company has performed a service but has not yet received payment,what is the required journal entry to be recorded?
A)Accounts Receivable - Debit;Service Revenue - Credit
B)Service Revenue - Debit;Accounts Payable - Credit.
C)Service Revenue - Debit;Accounts Receivable - Credit
D)No entry is required until the cash is received.

Question

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When a company performs a service but hasn't yet received payment, it records the transaction as Accounts Receivable (Debit) to recognize the amount owed by the customer, and Service Revenue (Credit) to recognize the revenue earned from the service. This follows the accrual basis of accounting, where revenues are recorded when earned, regardless of when the cash is received.

When a Company Has Performed a Service but Has Not