In October,cash Is Received in Advance of Rendering Services

question 48

Multiple Choice

In October,cash is received in advance of rendering services.Assuming that half of the services have been performed by December 31,the year-end adjustment would:

• A)decrease Unearned Service Revenue and decrease Cash.
• B)increase Accounts Receivable and increase Service Revenue.
• C)increase Cash and increase Service Revenue.
• D)decrease Unearned Service Revenue and increase Service Revenue.

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Definitions:

Actual Manufacturing Overhead Cost

The actual costs incurred for indirect manufacturing expenses, such as utilities, rent, and maintenance.

Year

A period of time consisting of 12 months or 365 days, used as a basic unit for measuring time in relation to the earth's orbit around the sun.

Cost of Goods Available for Sale

The total cost of inventory that a business has ready for sale, comprising both beginning inventory plus the cost of goods manufactured.

Overapplied

A situation where the allocated manufacturing overhead cost exceeds the actual manufacturing overhead costs incurred, resulting in an apparent surplus.