A Company Provided $12,000 of Consulting Services on Account $\begin{array} { | l | r | r | } \hline \text { Accounts receivable } & 12,000 & \\\hline \text { Cash} & & 12,000 \\\hline\end{array}$

question 194

Multiple Choice

A company provided $12,000 of consulting services on account. The customer promises payment in 30 days. Identify the journal entry below that properly records this transaction.

• A) \(\begin{array} { | l | r | r | }
• \hline \text { Accounts receivable } & 12,000 & \\
• \hline \text { Cash} & & 12,000 \\
• \hline
• \end{array}\)
• B) \(\begin{array}{|l|r|r|}
• \hline \text { Cash } & 12,000 & \\
• \hline \text { Consulting servicesrevenue } & & 12,000 \\
• \hline
• \end{array}\)
• C) \(\begin{array} { | l | l | l | }
• \hline \text { Consulting services revenue } & 12,000 \\
• \hline \text { Cash } & & 12,000\\
• \hline
• \end{array}\)
• D) \(\begin{array}{|l|r|r|}
• \hline \text { Accounts payable } & 12,000 & \\
• \hline \text { Consulting servicesrevenue } & & 12,000 \\
• \hline
• \end{array}\)
• E) \(\begin{array}{|l|r|r|}
• \hline \text { Accounts Receivable } & 12,000 & \\
• \hline \text { Consulting servicesrevenue } & & 12,000 \\
• \hline
• \end{array}\)

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Definitions:

Marginal Revenue

The increase in income resulting from the sale of one extra unit of a product or service.

Average Revenue

The amount of revenue a company receives per unit of sales, calculated by dividing total revenue by the number of units sold.

Market Equilibrium

A condition in which market supply and demand balance each other, and as a result, prices become stable.

Competitive Industry

A competitive industry is one where numerous producers compete with each other to satisfy the needs and wants of consumers, characterized by free entry and exit and a high level of innovation.