1. July 30, 2010, service revenue earned: cash collected $80,000; on credit $12,000.

I am tasked with composing a balance sheet as of 12/31/2010, but I do not understand what is "on credit" in this scenario. My first thought is that the service revenue earned and the credit would have to add up to cash collected - but without knowing what's "on credit" - it's hard to understand. Also - would there be any necessary adjustments for this at the end of the year?

Date Given Description Debit Description Credit Description Debit Amount Credit Amount 7/30/2010 80K Cash collected, service revenue earned; on Cash $ 80,000.00 credit 12K Earned Revenue 68,000.00 Credit $ 12,000.00