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Advanced Health determines that services for $1,800 had been provided and the client had not paid at the time the services were performed. The transaction was not recorded during the year. Record the required adjusting entry related to the external journal entry.

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Answer:

Debit to Accounts Receivable $1,800; Credit to Service Revenue $1,800

Explanation:

The debit is "Accounts Receivable" since Advanced Health is yet to collect payment from the client.

Now, the credit would be "Service Revenue" since Advanced Health had already provided the services.

In accrual accounting, whenever services have already been rendered, regardless of when it is collected, we have to record the revenue.

In this case it will be called "Service Revenue" since the company is rendering services.