Received Cash For Services Performed Journal Entry

Received Cash / Cheque Or Check For Services Performed Journal Entry

When the owner or the company or corporation received Cash or Bank i.e., payment through Cheque / Check against the services performed / rendered, then, we debit cash account or bank account and credit the Service Revenue Account as a Revenue for the business. The journal entry is shown below:

                                                                       Cash a/c / Bank a/c  XXX

 

                                                                                                                  Service Revenue a/c  XXX

 

                                                                                       (Services Sold For Cash)

Example: Mr. A is a sole owner of his business. He performed services of Rs. 9000 for his clients. What is the journal entry and the effect of this transaction on accounting equation?

                                                                                     Cash a/c  9000

 

                                                                                                             Service Revenue a/c  9000

 

                                                                             (Received Cash For Services Performed)

The Effect Of Received Cash / Cheque Or Check On Accounting Equation

                                          Assets         =           Liabilities        +       Owner’s Equity

                                          +Cash          =                   0                +    (+Service Revenue)

                                          +9000          =                   0                +             (+9000)

The cash is added to the asset side of the accounting equation as it is increasing while service revenue is also added to owner’s equity as it is increasing due to services sold to client and also it is the result of operational activities of the owner (Mr. A) of the business. At the end, the accounting equation remain in balance i.e., Left Side is equal to Right Side at Rs. 9000.