The sale of services might be a new concept for you as we have commonly heard more about the sale of goods by the businesses. However, the treatment of the two is the same in the books of accounts. Like goods, the sale of services is made on cash as well as credit basis. There are plenty of services provided by companies such as financial, management, software, consulting, marketing services, etc. 

Journal entry for the sale of services on credit

The respective debtor account is debited while the sales account is credited.

1. According to the golden rules of accounting:

(being services sold on credit)

2. According to the modern rules of accounting:

(being services sold on credit)

Example

Mr. K availed the financial services of XYZ Ltd. in May amounting to 20,000 with an agreement to pay the same in the following month. The journal entry in the books of XYZ Ltd. for the month of May is as follows:

(being services sold on credit)

Hope this helps.