When looking at transactions when it says, "provided $686,000 of services on account," where do I put the $686,000 on a balance sheet/income statement/Statement of cash flows? Would this be listed as a charge that we collected or paid?
Services Performed on Account:
A company generates revenue through the sale of goods or through the provision of services. Sales or services may be made in cash or on credit. In cash sales or services, cash is immediately received however in credit sales or service, cash is received on a later date.
Answer and Explanation:
When services are performed on account, it means that the services are rendered but the customer is yet to pay the amount.
It will be recorded as 'service revenue in the income statement and as 'account receivables' in the Balance sheet.
It will be not be recorded in the statement of cash flows, as the actual cash receipt is yet to be made.
Account receivables are a charge for payment collection to be made from the customer. It is recorded under the current assets section in the Balance sheet.
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from Financial Accounting: Homework Help ResourceChapter 3 / Lesson 20