Question

When a business sends a bill for $200 to a customer for services rendered, the journal entry to record this transaction will include a $200 credit to accounts receivable

a. true
b. false

Answer 1

The statement is false because when a business bills a customer, accounts receivable should be debited, not credited, reflecting the increase in assets the business now has a claim to.

Step-by-step explanation:

The statement that a credit to accounts receivable will be recorded when a business sends a bill to a customer for services rendered is false. Instead, the correct journal entry will include a $200 debit to accounts receivable and a $200 credit to revenue (or service income). This is because the company has provided a service and now has a claim to the money, which makes accounts receivable increase, and revenues also increase as a result of the service being provided.