When a service is being sold on credit, which account is debited?

When a service is sold on credit, the customer account is debited to reflect the amount owed by the customer for the service provided. This entry increases the accounts receivable balance, which is an asset on the balance sheet, because it represents money that is expected to be received in the future from customers who have not yet paid for the services they have received.

Debiting the customer account recognizes that the company has rendered a service and is now awaiting payment, thus actively recording the transaction in the financial records. This process appropriately aligns with the principles of accrual accounting where revenue is recognized when it is earned, regardless of when cash is received.

In contrast, other accounts listed would not be debited in this situation. For instance, the sales account reflects total sales and would typically be credited when a sale is made. The revenue account captures income from services but is not directly debited when transactions occur on credit. Lastly, the expense account reflects costs incurred by the business and would not be affected by the act of selling a service on credit.