Question

The entry to record revenue earned on account includes a debit to ________ and a credit to ________.

1) Accounts Payable, Revenue
2) Accounts Receivable, Revenue
3) Accounts Payable, Accounts Receivable
4) Revenue, Accounts Payable

Answer 1

The correct entry to record revenue earned on account is a debit to Accounts Receivable and a credit to Revenue. This records the money owed to the company and the income earned, respectively.

Step-by-step explanation:

The entry to record revenue earned on account includes a debit to Accounts Receivable, which reflects the amount that customers owe the company, and a credit to Revenue, which represents the income earned from providing goods or services. Therefore, the correct answer is option 2) Accounts Receivable, Revenue. This is in accordance with the double-entry bookkeeping system where every transaction affects at least two accounts with a debit and a credit entry and the total debits must equal total credits. In this case, when a company earns revenue by providing services or goods to customers on credit, it does not receive cash immediately. Instead, the company records an increase in Accounts Receivable (an asset account) and an increase in Revenue (a revenue account).