Performing a Service for $500 Cash and $700 on Account

question 88

Multiple Choice

Performing a service for $500 cash and $700 on account would include a:

• A)debit to cash for $1,200.
• B)debit to service revenue for $1,200.
• C)credit to service revenue for $500.
• D)debit to accounts receivable for $700.

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Definitions:

GIC

Guaranteed Investment Certificate, a Canadian investment that offers a guaranteed rate of return over a fixed period.

Maturity Value

The total amount that will be paid out or received at the end of a financial instrument's term, including principal and interest.

Semi-Annually Compounded

Interest on an investment or loan that is calculated and added to the principal balance twice a year.

Quarterly Compounded

Interest is added to the principal every three months, with subsequent interest calculations based on the resulting total.