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16 April, 13:38

An accountant has debited an asset account for $1,200 and credited a liability account for $500. What can be done to complete the recording of the transaction?

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  1. 16 April, 15:04
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    It will certainly need to record a credit for 700

    That could be an asset accounts (1)

    or revenue accounts (2)

    Explanation:

    There are many ways to do it:

    (1)

    it could credit another asset.

    Invenotry 1200

    Account payable 500

    Cash 700

    the company purchase inventory (asset) It pay 700 right away and the rest later

    (2)

    It could credit a revenue account

    cash 1,200

    unarned revenue 500

    sales revenue 700

    The company receive cash for a customer, but only a partial amount of the job is done, so one part is earned (revenue) adn another one is not (unearned revenue)
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