Question

Collins provided $15,760 of services on account. Debit A/R (15,760) Credit Service Rev (15,760)

1.increase assets (a/r)
2.increase SHE (serv. rev.)
3Asset source
4.No cash flow

Answer 1

When Collins provided $15,760 of services on account, it increased the Accounts Receivable (A/R) and Service Revenue accounts. This transaction is an example of an asset source and does not result in any cash flow.

Step-by-step explanation:

When Collins provided $15,760 of services on account, it means that Collins performed services for a customer and allowed them to pay at a later date. To record this transaction, the Accounts Receivable (A/R) account is debited (increased) by $15,760, indicating the amount owed to Collins. The Service Revenue account is credited (increased) by $15,760, representing the revenue earned from the services provided.

This transaction increases the assets of the business because the Accounts Receivable account is an asset that represents the amount of money owed to the business by its customers. Since the revenue is also increasing, it will contribute to the Stockholders' Equity section of the balance sheet.

This transaction is an example of an asset source because it increases the assets of the business without affecting any liabilities or owner's equity directly. Lastly, since no cash is received in this transaction, there is no cash flow as a result of providing services on account.