If a client requests to not record cash received for a service, what is the correct response?

The correct response is that cash received for a service must be recorded in the financial records. This is because all financial transactions, especially income from services rendered, need to be accurately documented to maintain transparency and accountability in the financial statements. Proper recording ensures compliance with financial regulations and gives a true representation of the business's financial performance.

Excluding cash transactions from the records can lead to significant issues, including tax evasion or misrepresentation of income, which can have legal consequences for the business. Recording all income also allows for proper tracking of cash flow, which is crucial for effective business management and decision-making.

Additionally, the concept of revenue recognition requires that companies recognize income when it is earned, not when it is convenient or requested by the client to be omitted. Hence, proper practices in bookkeeping dictate that this income must be recorded regardless of client requests.