An Accountant Who Keeps His Books Using Accrual Accounting Performs

question 104

Multiple Choice

An accountant who keeps his books using accrual accounting performs a service but does not receive payment at the time the service is performed. The entry made by the accountant will require a credit to:

• A) Deferred Expense
• B) Service Revenue
• C) Unearned Expense
• D) Unearned Service Revenue

---

Definitions:

Sold

The completion of a transaction where goods or services are exchanged for money.

Conversion Cost

The combined costs of direct labor and manufacturing overhead required to convert raw materials into finished products.

November

The eleventh month of the year in the Gregorian calendar, usually consisting of 30 days.

Variable Cost

Outlays that fluctuate based on the level of a business's activity.