Question

Q 3.53: During the month of August, Jackson Products recognizes $15,000 in revenues. Jackson's accounting staff records these revenues by entering a $15,000 debit in the firm’s Revenues account and a $15,000 credit in the Accounts Receivable account. What, if any, effect will this entry have on Jackson’s financial statements?

Answer 1

Answer:

This journal entry is incorrectly recorded making the company's net income decrease in its income statement, retained earnings are decreased in its retained earnings statement, and its assets (receivable account) and the equity of its shareholders both decrease in your balance sheet

Explanation:

The right Journal entry is:

D Account receivable          15000

C Revenue                                            15000