If Cash Is Received from Customers in Payment for Products

question 145

Multiple Choice

If cash is received from customers in payment for products or services that have not yet been delivered to the customers, the business would record the cash receipt as:

• A) A debit to a prepaid expense account.
• B) A debit to an unearned revenue account.
• C) No entry is required at the time of collection.
• D) A credit to a prepaid expense account.
• E) A credit to an unearned revenue account.

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Definitions:

Ketones

Ketones are organic compounds characterized by a carbonyl group (C=O) linked to two carbon atoms. They are part of many biological and synthetic substances.

Diastereomers

Stereoisomers that are not mirror images of each other, differing in the arrangement of atoms in space, impacting physical properties and reactivity.

Tautomers

Isomers of organic compounds that readily interconvert, typically differing by the placement of a proton and the double bond.

Enol Tautomer

A form of tautomerism where a hydrogen atom shifts position, leading to a double bond and an alcohol group.