Wave Company Receives $18,000 in Advance This Month for Work

question 116

Multiple Choice

Wave Company receives $18,000 in advance this month for work to be performed next month.This month,the company should record a journal entry that includes a debit to:

• A)Cash and a credit to Service Revenue for $18,000.
• B)Cash and a credit to Deferred Revenue for $18,000.
• C)Cash and a credit to Accounts Receivable for $18,000.
• D)Prepaid Services and a credit to Cash for $18,000.

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Definitions:

Xylem

The vascular tissue that conducts water and dissolved minerals in plants.

Phloem

The vascular tissue in plants responsible for transporting sugars and other metabolic products downward from the leaves.

Vascular Tissue

The specialized tissue in plants that conducts water and nutrients through the plant body, comprising mainly of xylem and phloem.

Lignin

A substance found in many plant cell walls that confers rigidity and strength, particularly in woody tissues.