When a Customer Buys Services on Account, It Should Be

question 92

Multiple Choice

When a customer buys services on account, it should be recorded by the company as:

• A) a debit to Cash and a credit to Accounts Receivable.
• B) a debit to Accounts Receivable and a credit to Revenue.
• C) a credit to Unearned Revenue and a debit to Inventory.
• D) a debit to Cash and a credit to Accounts Payable.

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Definitions:

Elasticity Of Supply

A measure of how much the quantity supplied of a good responds to a change in the price of that good.

Inputs

Resources used in the production process, including labor, capital, materials, and energy.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price over a specified period.

Total Revenue

The overall income generated by a business from its sale of goods or services, calculated as the price per unit times the number of units sold.