Service rendered means the intangible value provided to customers against a sales invoice. Service sector businesses earn revenue by rendering/providing services to their customers.
This term is generally associated with services rendered/provided but not billed to customers. So, the accountant obtains details related to services rendered and sends invoices/bills by copying the details for the rendered services.
Example of services rendered
Following are examples of the services rendered to the customers.
- Medical services – Hospitals and health care providers render this service to their customers.
- Banking services– Banks and financial institutions render their services to customers.
- Teaching services– Universities, colleges, and schools render their services to students.
- Accounting services are the services delivered in bookkeeping, accounting, financial reporting, etc.
Accounting for the services rendered
The following journal entry is posted in the accounting books when an invoice for the services rendered to the customers is generated.
When service is rendered on credit
The following journal entry is posted when services are rendered on credit.
| Description | Debit | Credit |
| Accounts receivable | XXX | |
| Service income | XXX |
The debit impact of this transaction is recording receivable as economic benefits related to this transaction will be received shortly. On the other hand, the credit impact is recording service income/revenue as the business has rendered the services and earned the revenue.
The following journal entry is also posted in the accounting record when cash is received against receivable.
| Description | Debit | Credit |
| Cash/bank | XXX | |
| Accounts receivable | XXX |
The debit impact of this transaction is recording the cash received against receivables. On the other hand, credit impact removes receivables as this balance was realized.
When service is rendered in cash
The following journal entry is posted when service is rendered against cash received from the customers.
| Description | Debit | Credit |
| Cash/bank | XXX | |
| Service income | XXX |
The debit impact of this transaction is recording cash as received from the customer. On the other hand, credit impact is recording revenue/income in the business financial statement.
Conclusion
Service rendered means the intangible value provided to the customers, which needs to be billed. The revenue earned against rendered services is recognized as income in the business financial statement.
If service is rendered on credit, accounts receivable are debited, and income is credited to the business financial statement.
Daniyal Khatri, ACCA, is a seasoned bookkeeping specialist with over a decade of experience in designing precise, compliant financial systems. His expertise spans daily transaction tracking, ledger management, and financial record accuracy, ensuring businesses maintain organized, audit-ready books. Daniyal excels at aligning processes with evolving compliance standards, integrating user-friendly tools to automate workflows, and translating regulatory complexities into actionable steps. By combining technical proficiency with a focus on clarity, he empowers organizations to achieve error-free bookkeeping, minimize risk, and build a foundation for informed financial decisions.
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