Practice prompt · Q:transactions-to-statements/cash-service-and-wages-002

Cash service followed by a wage payment

Choose the debit and credit effects for cash revenue and a current wage expense.

Updated Aug 30, 2026 Review due Nov 30, 2026

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Riverbend Repair completes $7,500 of repair work and receives cash immediately. It then pays $2,500 cash to employees for work completed that day. Which pair of debit and credit effects is correct?

Choose the best answer. A Service: debit Cash and credit Service Revenue. Wages: debit Wages Expense and credit Cash. B Service: debit Service Revenue and credit Cash. Wages: debit Cash and credit Wages Expense. C Service: debit Cash and credit Unearned Revenue. Wages: debit Wages Expense and credit Cash. D Service: debit Cash and credit Service Revenue. Wages: debit Accounts Payable and credit Cash.

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Answer: A

The service entry debits Cash and credits Service Revenue for $7,500. The wage entry debits Wages Expense and credits Cash for $2,500.