The 2 assets received total $12,000, which equals the revenue from the completed service.
This reduces revenue and credits Accounts Receivable instead of recording the completed service and amount still due.
This omits the $7,000 receivable and understates revenue from the completed service.
Only $5,000 was received in cash; the remaining $7,000 is Accounts Receivable.
Answer: A
DebitCredit Debit: Cash $5,000 Debit: Accounts Receivable $7,000 Credit: Service Revenue $12,000 Orion Design receives $5,000 Cash and a $7,000 Accounts Receivable. Both assets increase with debits. Service Revenue increases by the full $12,000 earned and is credited.