Accounting Question?

Question

I have this big project due in my "Accounting for Small Business" class and I'm beyond confused....apparently, I should have paid a little more attention. How would I record this transaction in the general journal:

"Delivered invoice #1 for $1,200 for job completed"

Or does that transaction even require a journal entry? I just assumed it did seens how the teacher gave us about 10 sheets worth of double-columned 'general journal' paper. Isn't an invoice a bill? And if you delivered a bill for a job completed, wouldn't that be like "doing a job on account"? Therefore, wouldn't that be a debit to accounts receivable and credit to fees earned? That's what I'm thinking....but I'm only about 10% sure that's right. Please help!

Thanks in advance...

Answer 1

If you're on accrual method of accounting:

Debit Accounts Receivable $1,200
Credit Revenue $1,200

If you're on a cash basis, you do not record anything.

Answer 2

Normally I would use an event to change my accounts, but this may be where the instructor is trying to see if you understand the relationship between a customer owing you money, and what accounts to debit/credit.

It would seem to me that you performed work for 1,200. If the work has not been accounted for yet, and you have not been paid yet, this 1,200 would go to your accounts receivable account.

When the customer pays, you would back this out of the accounts receiveable, and modify the associated account that would increase. For example, if the customer paid cash for the service, you would debit cash, and credit accounts receivable by the same amount.

Answer 3

Without seeing the whole question, it is hard to give you a definitive answer, but I find it hard to see how it could be anything else. Mind you, I'm just a student as well (albeit with 20 years work experience behind me).