Breezy Refunds Co

question 192

Multiple Choice

Breezy Refunds Co.provides tax services on April 14th.They receive payment for their services on May 9.Which of the following is an appropriate journal entry for April 14th?

• A)No journal entry is made until payment is received.
• B)Debit Deferred Revenue and credit Tax Preparation Revenue.
• C)Debit Cash and credit Tax Revenue.
• D)Debit Accounts Receivable and credit Tax Preparation Revenue.

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Definitions:

Collection Procedures

Established methods and processes used by a company to collect payments or debts from its customers or debtors.

Terms Of Sale

Conditions on which a firm sells its goods and services for cash or credit.

Conditional Sales Contract

A conditional sales contract is an agreement in which the sale of an asset or property is contingent upon certain conditions, often including the completion of payment installments.

Default Risk

The risk that a borrower will not make the contractual interest or principal payments on their debt obligations.