Answer:
It will certainly need to record a credit for 700
That could be an asset accounts (1)
or revenue accounts (2)
Explanation:
There are many ways to do it:
(1)
it could credit another asset.
Invenotry 1200
Account payable 500
Cash 700
the company purchase inventory(asset) It pay 700 right away and the rest later
(2)
It could credit a revenue account
cash 1,200
unarned revenue 500
sales revenue 700
The company receive cash for a customer, but only a partial amount of the job is done, so one part is earned (revenue) adn another one is not (unearned revenue)
