If a Company Receives Payment When It Provides a Service

question 3

Multiple Choice

If a company receives payment when it provides a service:

• A) more than one journal entry is always needed.
• B) cash will be credited.
• C) a revenue account will be increased with a debit.
• D) stockholders' equity will increase.

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Definitions:

Extrapolation

The process of estimating, beyond the original observation range, the value of a variable on the basis of its relationship with another variable.

Previous Year's Budget

The financial plan containing income and expenditure for the prior year, used as a reference or benchmark for current financial planning.

Forecasting

The process of predicting future events, trends, and behaviors based on historical data and analysis.

Objective Setting

The process of establishing specific, measurable, attainable, relevant, and time-bound (SMART) goals for an organization or individual.