Question

Providing services to customers for cash would be recorded with a ______

Multiple Choice:
A.Credit to Service Revenue.
B. Credit to Cash
C. Debit to Accounts Receivable.
D. Debit to Service Expense.

Answer 1

The transaction of providing services to customers for cash is recorded in accounting with a debit to Cash and a credit to Service Revenue. The correct answer to the student's question is A. Credit to Service Revenue.

Step-by-step explanation:

When a company provides services to customers for cash, this transaction increases the company's cash and its revenue. In accounting, this is recorded with a dual entry to balance the books. Specifically:

• A debit to Cash, which represents an increase in the company's assets because cash is coming into the business.
• A credit to Service Revenue, which represents an increase in the company's earnings as it has provided a service.

Therefore, the correct answer to the question would be A. Credit to Service Revenue because when you provide a service for cash, you increase revenue, which is recorded as a credit in accounting.