Consulting Services Rendered On Account / Credit Journal Entry
Consulting Services Performed On Account Journal Entry / Performed Consulting Services For A Client On Account
Consulting Services Rendered On Account / Credit Journal Entry
Accounts Receivable a/c XXX
Consulting Services Revenue a/c XXX
(Consulting Services Rendered To Client On Account / Credit)
Example: Mr. A is a sole proprietor in his consultancy business performed services of Rs. 5000 for his client, Mr. B on account / credit. What is the journal entry and the effect of this transaction on the accounting equation?
Consulting Services Performed Or Rendered Or Sold On Account Journal Entry
Accounts Receivable a/c 5000
Consulting Services Revenue a/c 5000
(Performed Consulting Services On Account / Credit)
The Effect Of Consulting Services Rendered On Account On Accounting Equation / Consulting Services On Account / Credit Accounting Equation
Assets = Liabilities + Owner’s Equity
+Accounts Receivable = 0 + (+Consulting Service Revenue)
+5000 = 0 + (+5000)
The left side or asset side of the accounting equation is increased by Rs. 5000 as Accounts Receivable as a Current Asset is increased by Rs. 5000, so it is added to assets on the left side / asset side of the accounting equation. While on the right side or liabilities and owner’s equity side, the consulting service revenue is also increasing and as it is the result of operating activities of the owner, Mr. A of the business, so it is added to owner’s equity on the right side of the accounting equation. After recording the effect of this Transaction, the accounting equation remains in balance on both sides at Rs. 5000.
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