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13 February, 12:54

A company receives payment from one of its customers on August 5 for services performed on July 21. Which of the following entries would be recorded if the company uses accrual basis accounting?

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  1. 13 February, 13:57
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    Cash (or Banks) Debit

    Accounts Receivables Credit

    Explanation:

    According to accrual basis accounting, the Sale was recorded in July, as follows:

    Accounts Receivables Debit

    Sales Credit

    So, in August the company must book:

    Cash (or Banks) Debit

    Accounts Receivables Credit

    In this way, AR balance = zero (no pending credit to be collected)
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Home » Business » A company receives payment from one of its customers on August 5 for services performed on July 21. Which of the following entries would be recorded if the company uses accrual basis accounting?
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