Explain Why a $500 Revenue Collected in Advance for Service

question 13

Essay

Explain why a $500 revenue collected in advance for service would be recorded as a debit to cash and a credit to a liability account.

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Definitions:

Rationale

The underlying reasoning or explanation for a particular belief, action, or event.

Short-Run Instability

A situation in economics where variables such as output, employment, and prices are subject to frequent fluctuations over a short period.

Agriculture

The activity of farming the land, cultivating plants, and breeding animals for human needs and sustenance.

Causes

The reasons or motives behind certain events, actions, or outcomes, identifying why something happens.