Question

The Fine Repairing Company provides repairing services amounting to Rs 25,000 to Monster Company on March 25, 2018. The Monster Company promises to pay the service fee on June 15, 2018. No service revenue has been recorded by the Fine Repairing Company until the end of its accounting period i.e March 31, 2018. What shall be the adjusting entry as at 31st March 2018?

• A.

  Income on services A/c Dr	25,000
  To Monstor company A/c	25,000

• B.

  Monstor company A/c Dr	25,000
  To Income on services A/c	25,000

• C.

  Income on services A/c Dr	25,000
  To Cash A/c	25,000

• D. None of these

Answer 1

The correct option is B

Monstor company A/c Dr	25,000
To Income on services A/c	25,000

The correct entry is:

Monstor company A/c Dr	25,000
To Income on services A/c	25,000