If a Business Has Received Cash in Advance of Services

question 117

Multiple Choice

If a business has received cash in advance of services performed and credits a liability account, the adjusting entry needed after the services are performed will be

• A) debit Unearned Revenue and credit Cash.
• B) debit Unearned Revenue and credit Service Revenue.
• C) debit Unearned Revenue and credit Prepaid Expense.
• D) debit Unearned Revenue and credit Accounts Receivable.

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Definitions:

Eminent Domain

A governmental power whereby the government can take or condemn private property for a public purpose on the payment of just compensation.

Private Property

Land or possessions owned by individuals or corporations, not by the government or public as a whole.

Equal Protection

A legal principle under the Fourteenth Amendment of the U.S. Constitution, ensuring that no state shall deny to any person within its jurisdiction the equal protection of the laws.

Suspect Class

A category of individuals that is treated differently based on characteristics that the law deems inherently suspect, requiring strict scrutiny by courts.