Teton Tax Service Collects $440 for Preparation of a Tax

question 53

Multiple Choice

Teton Tax Service collects $440 for preparation of a tax return.The tax return will not be complete until the next accounting period.How does Teton record the $440 collected in advance?

• A)A debit to Cash of $440 and a credit to Deferred Revenue of $440.
• B)A debit to Deferred Revenue of $440 and a credit to Cash of $440.
• C)A debit to Cash of $440 and a credit to Revenue of $440.
• D)A debit to Revenue of $440 and a credit to Cash of $440.

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