Question

A business maintains subsidiary accounts for each of its customers. On May 15, the business provides services on account: $1,900 to customer J. Anthony; $4,900 to customer A. Martin; and $1,300 to customer S. Lee. Which journal entry is needed to record these transactions on May 15 (Choose the best answer)? A) May 15: debit Accounts Receivable $8,100; credit Service Revenue $8,100B) May 15: debit Accounts Receivable-J. Anthony $1,900, A. Martin $4,900, S. Lee $1,300; credit Service Revenue $8,100C) May 15: debit Service Revenue $8,100; credit Acct. Rec. $8,100D) May 15: debit Accts. Rec. Control $8,100; credit Sales Revenue $8,100May 15: debit Accts. Rec.-J. Anthony $1,900, A. Martin $4,900, S. Lee $1,300; credit Accts. Rec. Control $8,100

Answer 1

B) May 15: debit Accounts Receivable-J. Anthony $1,900, A. Martin $4,900, S. Lee $1,300; credit Service Revenue $8,100

Step-by-step explanation:

• customer J. Anthony ⇒ $1,900
• customer A. Martin ⇒ $4,900
• customer S. Lee ⇒ $1,300

total sales reported during May 15 = $8,100

A subsidiary ledger account is an individual account set for a specific client that is part of a general ledger account. In this case, the individual ledger accounts are part of the accounts receivable account.

You can record each transaction individually or jointly:

May 15, services provided on account:

Dr Accounts receivable - J. Anthony 1,900

Cr Sales revenue 1,900

May 15, services provided on account:

Dr Accounts receivable - A. Martin 4,900

Cr Sales revenue 4,900

May 15, services provided on account:

Dr Accounts receivable - S. Lee 1,300

Cr Sales revenue 1,300

or

May 15, services provided on account:

Dr Accounts receivable - J. Anthony 1,900

Dr Accounts receivable - A. Martin 4,900

Dr Accounts receivable - S. Lee 1,300

Cr Sales revenue 8,100

Answer 2

B

Step-by-step explanation:

The option B is correct because in individual subsidiary accounts, each customer entry will be separately made and total sales revenue will be recorded.