Question

When recording the entry to recognize the revenue that is earned from a client who will pay when invoiced, the entry should increase __________.

Answer 1

When recording the entry to recognize the revenue that is earned from a client who will pay when invoiced, the entry should increase **Accounts Receivable** (an asset account) and increase **Revenue** (in the income statement).

The journal entry would look like this:

- Debit: Accounts Receivable
- Credit: Revenue

This reflects that you have earned the revenue and have a claim to receive payment in the future.