When Revenue Is Recognized, an Income Statement Account for Revenue

question 27

Multiple Choice

When revenue is recognized, an income statement account for revenue is credited.Which of the following accounts would not normally be debited?

• A)Cash
• B)Accounts receivable
• C)Unearned revenue
• D)Capital stock

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Definitions:

Selling Price

The amount of money for which something is sold in the market.

Book Value

The net value of a company's assets minus its liabilities, often compared to the market value to assess if a stock is under or overvalued.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term financial health and ability to meet short-term obligations.

Accounts Payable

Short-term liabilities or debts a company owes to its creditors for goods and services purchased on credit.