Recording a service such as sprinkler repairs would primarily increase which revenue account?

Recording a service such as sprinkler repairs would primarily increase which revenue account?

• A. Service revenue
• B. Sales revenue
• C. Rental income
• D. Interest income

Answer: (A)

When you perform a service, the income generated is recorded in the service revenue account. Sprinkler repairs are a labor-based service, so the fees earned from doing the repair are counted as service revenue on the income statement. This is different from sales revenue, which comes from selling goods; rental income, which comes from leasing property or equipment; and interest income, which comes from interest earned on loans or investments. Revenue is recognized when the service is completed and collectible, so recording the sprinkler repair increases service revenue because the business has provided a service and earned a fee.

When you perform a service, the income generated is recorded in the service revenue account. Sprinkler repairs are a labor-based service, so the fees earned from doing the repair are counted as service revenue on the income statement. This is different from sales revenue, which comes from selling goods; rental income, which comes from leasing property or equipment; and interest income, which comes from interest earned on loans or investments. Revenue is recognized when the service is completed and collectible, so recording the sprinkler repair increases service revenue because the business has provided a service and earned a fee.