Chimney Sweeps provided chimney cleaning services to several clients during the month of February. Chimney's customers have not yet been billed. Chimney's customers owe $2,000 to Chimney. How will Chimney Sweeps record this transaction? a. Debit accounts receivable and credit cash b. Debit cash and credit services revenue c. Debit accounts receivable and credit services revenue

Business · College · Mon Jan 18 2021

Answered on

The appropriate way for Chimney Sweeps to record this transaction would be:

c. Debit accounts receivable and credit services revenue.

When services are provided but not yet billed to customers, it creates an account receivable, representing the amount owed by the customers to Chimney Sweeps. Thus, the company would debit accounts receivable (to recognize the amount owed) and credit services revenue (to recognize the revenue earned for the services provided).






Related Questions