Resource Services Company performed services in February for a specific customer, for a fee of $11,250

Accounting Jan 22, 2021

Resource Services Company performed services in February for a specific customer, for a fee of $11,250. Payment was received the following March.
(a) Was the revenue earned in February or March?
(b) What accounts should be debited and credited in (1) February and (2) March?

Expert Solution

a)The revenue was earned in February.

b)(1) Debit Accounts Receivable and credit Fees Earned or another appropriately titled revenue account in February.

(2) Debit Cash and credit Accounts Receivable in March.

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