Cosmos Computer Consulting (CCC) Is Preparing Their Year-End Financial Statements

question 68

Multiple Choice

Cosmos Computer Consulting (CCC) is preparing their year-end financial statements.They completed two projects in the last month: one worth $12,000 that has been billed to the customer but has not yet been paid, and one worth $18,000 that they have not yet been invoiced to the customer.In the case of the second contract CCC had received a $3,000 deposit at the beginning of the contract.With respect to these two contracts, what amount would be recorded as unearned revenue for Cosmos at year-end?

• A)$3,000
• B)$15,000
• C)$18,000
• D)There is no unearned revenue at year-end.

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Definitions:

Lump Sum

A single payment made at a particular time, as opposed to several smaller payments or installments.

Interest Rate

The cost of borrowing money or the return on investment, represented as a percentage of the principal.

Annuities

Financial products that pay out a fixed stream of payments to an individual, primarily used as an income stream for retirees.

Discount Rate

The interest rate charged by central banks on loans they give to commercial banks.