Questions: Knowledge Check 01 A company is in its first month of operations. The company performed 2,000 worth of services on January 28. The company expects to receive payment on February 15. What adjusting entry would be made at the end of January? Post the adjusting entry for the scenario provided. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 Record the adjusting entry for services provided on account during January. Note: Enter debits before credits. Date General Journal Debit Credit January 31

To record the adjusting entry for services provided on account during January, we need to recognize the revenue earned and the corresponding receivable, even though the payment will be received in February. This is in accordance with the accrual basis of accounting, which requires that revenues be recognized when they are earned, regardless of when the cash is received.

Here is the adjusting entry for the scenario provided:

\begin{tabular}{|c|c|c|c|} \hline Date & General Journal & Debit & Credit \\ \hline January 31 & Accounts Receivable & \$2,000 & \\ \hline & Service Revenue & & \$2,000 \\ \hline \end{tabular}

Explanation:

• Accounts Receivable (Debit \$2,000): This entry records the amount that the company expects to receive from the customer for the services provided. It increases the Accounts Receivable account, which is an asset.
• Service Revenue (Credit \$2,000): This entry records the revenue earned from providing the services. It increases the Service Revenue account, which is a revenue account.

In summary, the adjusting entry ensures that the revenue earned in January is recognized in the same period, even though the cash will be received in February.