Which Two Types Of Accounts Are Affected When Services Are Sold On Account / Credit
What Two Accounts Are Affected When Services Are Sold By Business On Account Or On Credit / The Effect Of Credit Sales On The Accounting Equation When a business rendered or performed services on account / credit, then Accounts Receivable Account and Sales Account are affected as the customers to whom the business rendered services did not pay at the time of receiving services but to pay at some later date. So, the sales is also made on account i.e., Credit Sales is made as not payment is received at the time of rendering the services to customers. According to Accrual Concept , we record a Business Transaction whether the cash is paid or not. Example, Mr. A is a Sole Proprietor in his own business. He sold / performed services for his client, Mr. B for Rs. 2000 but the client did not pay at the time of receiving services but he will pay at a future date as agreed between both of them. What is the journal entry and two accounts involved in this transaction which affects...