Blake Co Provided $5,000 of Consulting Services to Simmons Co

question 7

Multiple Choice

Blake Co. provided $5,000 of consulting services to Simmons Co. for which they have not yet received payment. When Blake billed Simmons for the consulting services, Blake mistakenly journalized and posted the transaction as a $5,000 debit to Accounts Receivable and a $5,000 credit to Unearned Consulting Fees. The entry Blake needs to make to correct this error is

• A) Debit Unearned Consulting Fees and credit Consulting Fees Earned for $5,000
• B) Debit Unearned Consulting Fees and credit Accounts Receivable for $5,000
• C) Debit Consulting Fees Earned and credit Accounts Receivable for $5,000
• D) Debit Consulting Fees Earned and credit Unearned Consulting Fees for $5,000

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Definitions:

Positive Alphas

Investments that have performed better than their benchmark indices, indicating they have generated excess returns adjusted for risk.

Betas

A measure of a stock's volatility in relation to the overall market, indicating its risk compared to the market average.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, commonly considered the yield of government bonds like T-bills.

Expected Market Rate

The average rate of return anticipated by market participants, based on forecasts and historical trends.