On 20 June 2016,Parker Services Received $2 400 in Advance

question 42

Multiple Choice

On 20 June 2016,Parker Services received $2 400 in advance from a customer for one month's service.The journal entry to record the receipt of cash would be which of the following?

• A)Debit Cash $2 400 and credit Service revenue $2 400.
• B)Debit Cash $2 400 and credit Unearned service revenue $2 400.
• C)Debit Unearned service revenue $2 400 and credit Service revenue $2 400.
• D)Debit Unearned service revenue $2 400 and credit Cash $2 400.

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Definitions:

Standard Hours

The predetermined amount of time expected to complete a task or produce a unit of product under normal conditions.

Actual Output

The real quantity of goods or services produced by a company during a specific period.

Labor Efficiency Variance

A measure in managerial accounting that compares the actual hours worked to the standard hours planned for a process, indicating efficiency in labor usage.

Labor Rate Variance

The difference between the actual labor costs incurred and the expected (or standard) labor costs for the production achieved.