From the course: Advanced Bookkeeping Techniques
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Journal entries: Recording revenues and expenses
From the course: Advanced Bookkeeping Techniques
Journal entries: Recording revenues and expenses
- Let's now use journal entries to record actual business operations. The earning of revenue, the incurrence of expenses. Vieta Landscape Solutions performed landscape consulting services and build clients $200,000 for these services. Note that Vieta did the work and build the clients but did not yet receive any cash. First, does this transaction involve any cash? No, no, no, no cash but this is a standard business practice doing work for clients now and getting paid later. Second, are there any other assets involved? Well, yes, this transaction involves the interesting asset accounts receivable. Accounts receivable represents the amount our customers owe us based on goods or services we have provided for which they have promised to pay but have not yet paid. The amount of accounts receivable goes up. Asset increases are recorded with debits. So here's the start of our journal entry. Third, are there any liabilities…
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