If Services Are Rendered For Cash Or Bank, Then What?
If Services Are Sold Out For Cash Or Bank Then What Is The Journal Entry And Its Effect On Accounting Equation? When services are rendered, performed or sold for cash or bank i.e., payment is received by cheque or check, then we debit cash or bank account and credit sales account as cash or cash received by check / cheque (bank) is coming into the business, so there is an increase in cash or bank account being a Current Asset which ultimately affects assets side of the accounting equation. Sales is also increasing as services are receiving by the clients from the business and as sales is the results of operating activities or profitable activities of the owner of the business, so it positively affects owner’s equity on the right side of the accounting equation. The journal entry for services rendered for cash / bank is shown below: ...