On October 1 of the Current Year, Wood Services Received

question 126

Multiple Choice

On October 1 of the current year, Wood Services received $15,000 for services to be performed evenly over the next 12 months. Wood Services initially recorded the $15,000 as service revenue. The adjusting entry on December 31 of the current year will include a:

• A)debit to service revenue for $11,250.
• B)debit to service revenue for $3,750.
• C)debit to unearned service revenue for $3,750.
• D)debit to unearned service revenue for $11,250.

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Definitions:

Delegates Duty

The act of assigning one's responsibilities or tasks to another person, often seen in contracts and employment relationships.

Obligated

Refers to having a legal or moral duty to do something.

Assigns Right

The transfer of rights or interests in a property or contract from one party to another.

Rent Payments

Periodic payments made by a tenant to a landlord in exchange for the right to occupy or use the property of the landlord.