The Journal Entry to Record the Performance of Services for Cash

question 58

Multiple Choice

The journal entry to record the performance of services for cash would include

• A) a debit to Cash and a credit to Fees Income.
• B) a debit to Fees Income and a credit to Cash.
• C) a debit to Cash and a credit to Accounts Receivable.
• D) a debit to Accounts Receivable and a credit to Cash.

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Definitions:

Payroll Accrual

The recording of the earnings of employees that have been earned but not yet paid, typically used to accurately represent a company's liabilities.

Annual Payroll

The total amount of wages, salaries, bonuses, and other compensation paid by a business to its employees over a year.

Business Days

Days of the week excluding weekends and public holidays, typically Monday through Friday, when business operations are conducted.

Fixed Charge Coverage

A financial metric evaluating how well a company can pay off its fixed expenses, like interest and leases, using its earnings before interest, taxes, depreciation, and amortization (EBITDA).