When a Company Bills a Customer for $700 for Services

question 52

True/False

When a company bills a customer for $700 for services rendered, the journal entry to record this transaction will include a $700 debit to Services Revenue.

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Definitions:

Cost Flow

The manner in which costs move through a company's inventory accounts to eventually become cost of goods sold.

FIFO

An inventory valuation method which assumes that the first goods purchased or produced are also the first ones sold, also known as "First In, First Out."

Ending Inventory

The worth of products ready for purchase at the close of a financial period.

Cost Flow Assumption

The method used by businesses to value inventory and calculate the cost of goods sold, based on the order in which products are bought or produced.