Question

Neeta Landscaping Company provides lawn care services to a customer and immediately receives $45. Which of the following describes how the company will account for this transaction?

A. Debit Other operating expense for $45
B. Credit Cash for $45
C. Credit Service Revenue for $45
D. Retained earnings decreased by $45

Answer 1

C. Credit Service Revenue for $45

Step-by-step explanation:

The journal entry to record this given transaction is shown below:

Cash A/c Dr $45

To Service Revenue A/c $45

(Being the cash received is recorded)

At the time of receiving the cash, we debited the cash account and since the service is provided so we credited the service revenue. Both the accounts are to be credited and debited for $45