When a Company Has Performed a Service but Has Not

question 119

Multiple Choice

When a company has performed a service but has not yet received payment,what is the required journal entry to be recorded?

• A) Accounts Receivable - Debit; Revenue from Services - Credit
• B) Revenue from Services - Debit; Cash - Credit
• C) Unearned Revenue from Services - Debit; Accounts Receivable - Credit
• D) Revenue from Services - Debit; Accounts Receivable - Credit

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Definitions:

Underapplied Manufacturing Overhead

Occurs when the actual manufacturing overhead costs are higher than the manufacturing overhead assigned to goods produced.

Work in Process Inventory

The account used in manufacturing to track the costs of products that are in the production process but not yet completed.

Overapplied Manufacturing Overhead

A situation where the actual manufacturing overhead costs are less than the overhead assigned to products.

Underapplied Manufacturing Overhead

The condition where the estimated manufacturing overhead costs are less than the actual overhead incurred, resulting in a shortfall that needs to be adjusted.