Question

multiple choice question
chimney sweeps provided chimney cleaning services to several clients during the month of february. chimneys customers have not yet been billed. chimneys customers owe $2,000 to chimney. how will chimney sweeps record this transaction?
debit accounts receivable and credit services revenue
debit cash and credit services revenue
debit accounts receivable and credit cash
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Explanation:

Step1: Identify earned revenue

The company provided services, so $2,000 of services revenue is earned. Revenue increases with a credit.

Step2: Identify unpaid customer amount

Customers owe $2,000 (unbilled), which is accounts receivable, an asset. Assets increase with a debit.

Step3: Match to correct entry

The transaction requires debiting accounts receivable and crediting services revenue.

Answer:

Debit accounts receivable and credit services revenue