Question

A company bills customers for services rendered on account. Which of the following is part of recording this transaction?

a) Decrese service revenue
b) Decrease cash c) Increase account receivable d) Increase Unearned revenue

Answer 1

Answer: C

Increase account receivables.

Step-by-step explanation:

Account receivables are also known as trade receivable. Whenever a transaction or transaction is performed on credit or on account, trade receivables will increase, that is the accountant is to debit the sales receivable account.

Answer 2

c) Increase account receivable

Step-by-step explanation:

When a company is billing customers for services on account their accounts receivable will increase because the company is selling the services to its customers on account which means they will receive money later so their accounts receivable will increase.

A is incorrect because service revenue will increase when they bill customers for services.

B is incorrect because cash will remain the same when they bill the customers.

D is incorrect because unearned revenue will remained unchanged.