Which of the following is correct, assuming the following transaction: Nixon Company sold services on account.
A) Cash is credited.
B) Accounts Receivable is credited.
C) Income from Services is credited.
D) Cash is debited.

Question

Quizplus · Accepted Answer

When Nixon Company sells services on account, it means the customer will pay at a later date, so Accounts Receivable (an asset) increases (is debited), and Income from Services (revenue) increases (is credited). Cash is not immediately affected since the sale is on account.

Which of the Following Is Correct, Assuming the Following Transaction