Anaya receives a bank statement showing a deposit of \$1,000 into her business account. Which journal entry should she record to reflect this transaction?

• A. Debit Cash \$1,000; Credit Accounts Receivable \$1,000
• B. Debit Cash \$1,000; Credit Revenue \$1,000
• C. Debit Accounts Payable \$1,000; Credit Cash \$1,000
• D. Debit Revenue \$1,000; Credit Cash \$1,000

Answer: (B)

Verified step by step guidance

1. Understand the nature of the transaction: Anaya has received a deposit of \$1,000 into her business account. This means her cash balance has increased, and the source of this cash needs to be identified.
2. Determine the correct accounts to be affected: Since the deposit increases the business's cash, the 'Cash' account (an asset) must be debited. The credit side should reflect the source of the cash, which in this case is revenue earned by the business.
3. Apply the double-entry accounting principle: For every debit, there must be an equal credit. Debit the 'Cash' account to increase it, and credit the 'Revenue' account to record the income earned.
4. Write the journal entry: The journal entry should be as follows: Debit 'Cash' for \$1,000 and Credit 'Revenue' for \$1,000. This reflects the increase in cash and the recognition of revenue.
5. Verify the entry: Ensure that the total debits equal the total credits (\$1,000 each) and that the accounts affected align with the nature of the transaction (cash received and revenue earned).