Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 14 - No. 48)
What is the correct journal entry when a company receives cash for services to be performed in the future?
Debit Cash; Credit Service Revenue
Debit Accounts Receivable; Credit Service Revenue
Debit Cash; Credit Unearned Revenue
Debit Unearned Revenue; Credit Cash
Explanation
Cash increases (debit) and Unearned Revenue (a liability) increases (credit).
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