Lynn and Jan Operate a Bed and Breakfast on the Coast

question 154

Multiple Choice

Lynn and Jan operate a bed and breakfast on the coast of Alabama.As customers make reservations they are required to pay cash in advance equal to one-half of the rate for their stay.On January 21 they took a reservation for a booking in May 27-29 with a total cost of $900.Use the following tabular analysis to record the cash receipt on that date:

• A)Increase Cash $450 and Unearned Revenue $450.
• B)Increase Cash $450 and Service Revenue $450.
• C)Increase Cash $450 increase Accounts Receivable $450 and increase Service Revenue $900.
• D)Increase Accounts Receivable $450 increase Cash $450 increase Service Revenue $450 and increase Unearned Revenue $450.

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Definitions:

Company's Records

Documentation and files maintained by a company, detailing its financial transactions, legal obligations, and operational activities.

Cash Short

A situation where the amount of cash in a register or petty cash drawer is less than what the records indicate should be present.

Over

Typically refers to situations where actual costs or quantities exceed estimates or planned values in a budget, project, or manufacturing.

Cash Controls

Procedures and policies that are implemented to manage and safeguard a company's cash transactions.