From the course: Accounting Foundations: Bookkeeping

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Providing services

Providing services

From the course: Accounting Foundations: Bookkeeping

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Providing services

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- Now that you have your lawnmower, transportation, supplies and inventory, it's time for you to get to work. The next category of common transactions involves the sales of service or merchandise. You generate revenues and incur expenses during this process. Sometimes you might sell services and merchandise for cash, at other times you might sell them on credit and a receivable is established for collection at a later date. Therefore revenues indicate the source, not only of cash but of other assets as well, all of which are received in exchange for the merchandise or services provided. Similarly, expenses may be incurred and paid immediately with cash or they may be incurred on credit and as they may be charged with a cash payment to be made at a later date, we will illustrate these possibilities in the transactions to follow. And note that the effective revenues and expenses on owner's equity is indicated in brackets for each transaction. So, let's get started. As soon as your…

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