Question

Jones Company received $2,200 in cash during March for Service Revenue for a job that will be completed in May. This job would be completed before the end of the year when the finance's are prepared. Since it is short lived and will be earned during this accounting period, Jones Company decided to record it as revenue instead of a liability at the time the cash was received in March. The journal entry to record this transaction when we received the cash in March would be:

Answer 1

Step-by-step explanation:

The journal entry is shown below:

Cash A/c Dr $2,200

To Service revenue $2,200

(Being cash is received)

Since the cash is received so we debited the cash account and credited the service revenue account as the service is completed which create an income for the business organization.

We do not write unearned service revenue as the amount is actually received from the customer