Question

StoryBook Company provided services to several customers during the month of December. These services have not yet been paid by the customers. StoryBook should record the following adjusting entry at the end of December:

Answer 1

Answer:

                                                             Debit                Credit

Accounts Receivable                           xxx

Revenue                                                                        xxx

Explanation:

Since the services to the customers has been provided by the StoryBook Company  for the month of the December, therefore,the revenue shall be credited in the accounts of the StoryBook Company but since the customer has not paid for the services provided, therefore the accounts receivable shall be debited and accordingly the following journal entry shall be recorded in the accounts by the StoryBook Company:

                                                             Debit                Credit

Accounts Receivable                           xxx

Revenue                                                                        xxx