A Company Receives Payment from One of Its Customers on August

Multiple Choice

A company receives payment from one of its customers on August 5 for services performed on July 21. Which of the following entries would be recorded if the company uses accrual basis accounting?

A) $$\begin{array} { | c | r | r | } \hline \text { Cash } & 1,000 & \\\hline \text { Accounts Receivable } & & 1,000 \\\hline\end{array}$$
B) $$\begin{array} { | c | r | r | } \hline \text { Accounts Payable } & 1,000 & \\\hline \text { Cash } & & 1,000 \\\hline\end{array}$$
C) $$\begin{array} { | c | r | r | } \hline \text { Cash } & 1,000 & \\\hline \text { Service Revenue } & & 1,000 \\\hline\end{array}$$
D) $$\begin{array} { | c | r | r | } \hline \text { Service Revenue } & 1,000 & \\\hline \text { Cash } & & 1,000 \\\hline\end{array}$$