QQuestionAccounting
QuestionAccounting
Tasia is using accrual accounting in QuickBooks and created a customer invoice.
Which account is debited when the invoice is created?
A. Accounts receivable
B. Sales of product income
C. Owner's equity
D. Checking account
E. Miscellaneous income
over 1 year agoReport content
Answer
Full Solution Locked
Sign in to view the complete step-by-step solution and unlock all study resources.
Step 1:Let's solve this accounting problem step by step:
Step 2:: Understand Accrual Accounting
In accrual accounting, revenue is recorded when it is earned, regardless of when cash is received. When an invoice is created, two accounting entries are made: - A debit to Accounts Receivable - A credit to Sales of Product Income
Step 3:: Analyze the Invoice Creation
When Tasia creates a customer invoice in QuickBooks using accrual accounting: - The amount owed by the customer is recorded as an asset (Accounts Receivable) - This means Accounts Receivable is DEBITED
Step 4:: Eliminate Incorrect Options
- Checking account (D) is not debited when an invoice is created - Owner's equity (C) is not affected by invoice creation - Miscellaneous income (E) is not the correct account - Sales of product income is CREDITED, not debited
Step 5:: Confirm the Accounting Principle
\text{Sales of Product Income} \quad \text{(Credit)}
The standard accounting entry for an invoice is:
Final Answer
Accounts Receivable is debited when the invoice is created in accrual accounting.
Need Help with Homework?
Stuck on a difficult problem? We've got you covered:
- Post your question or upload an image
- Get instant step-by-step solutions
- Learn from our AI and community of students