Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 19 - No. 30)
What is the correct journal entry when a business receives cash from a customer for a prior service?
Debit Accounts Receivable, Credit Service Revenue
Debit Cash, Credit Service Revenue
Debit Service Revenue, Credit Cash
Debit Cash, Credit Accounts Receivable
Explanation
Receiving cash from a customer for previous services increases cash (debit) and decreases accounts receivable (credit).
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