Which two entries would be recorded to log Lou receiving a $100 payment for a weeding job he completed for Ms. Rosa?

Which two entries would be recorded to log Lou receiving a $100 payment for a weeding job he completed for Ms. Rosa?

• A. $100 Debit in Cash and $100 Credit in Lawncare Revenue
• B. $100 Debit in Lawncare Revenue and $100 Credit in Cash
• C. $100 Debit in Cash and $100 Debit in Lawncare Revenue
• D. $100 Credit in Cash and $100 Credit in Lawncare Revenue

Answer: (A)

When a service is paid for in cash, you record an increase in cash (an asset) and an increase in revenue (owners’ equity). In double-entry bookkeeping, the sum of debits must equal the sum of credits, so you debit the asset that increases and credit the revenue that increases. For the $100 payment, you would debit Cash for $100 to show the cash inflow, and you would credit Lawncare Revenue for $100 to record the earned income. This reflects the transaction’s effect on both the balance sheet (more cash) and the income statement (more revenue). Why the other patterns don’t fit: debiting revenue would decrease revenue, and crediting cash would reduce assets, which doesn’t match the actual increase in cash or the earned revenue. If the payment were received later rather than at the time of service, you’d debit Accounts Receivable instead of Cash, with a credit to Revenue.

When a service is paid for in cash, you record an increase in cash (an asset) and an increase in revenue (owners’ equity). In double-entry bookkeeping, the sum of debits must equal the sum of credits, so you debit the asset that increases and credit the revenue that increases.

For the $100 payment, you would debit Cash for $100 to show the cash inflow, and you would credit Lawncare Revenue for $100 to record the earned income. This reflects the transaction’s effect on both the balance sheet (more cash) and the income statement (more revenue).

Why the other patterns don’t fit: debiting revenue would decrease revenue, and crediting cash would reduce assets, which doesn’t match the actual increase in cash or the earned revenue. If the payment were received later rather than at the time of service, you’d debit Accounts Receivable instead of Cash, with a credit to Revenue.