When a Company Has Performed a Service but Has Not

question 182

Multiple Choice

When a company has performed a service but has not yet received payment, it

• A)debits accounts receivable and credits service revenue.
• B)debits revenue from services and credits accounts receivable.
• C)debits revenue from services and credits accounts payable.
• D)makes no entry until the cash is received.

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Definitions:

Profit-Maximizing

Refers to strategies or decisions taken by a company to maximize its profits by increasing revenue, reducing costs, or both.

Charge a Price

The act of assigning a monetary value to a product or service that customers must pay to obtain it.

Marginal Cost

is the cost incurred by producing one additional unit of a product or service.

Profits

The financial gain made in a transaction or operation, calculated as the difference between revenue and expenses.