Duluth CoCollected a $6,000 Cash Advance from a Customer on November

question 83

Multiple Choice

Duluth Co.collected a $6,000 cash advance from a customer on November 1,2016 for work to be performed over a six-month period beginning on that date.If the year-end adjustment is properly recorded,what will be the effect of the adjusting entry on Duluth's 2016 financial statements?

• A)Increase assets and decrease liabilities
• B)Increase assets and increase revenues
• C)Decrease liabilities and increase revenues
• D)No effect

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Definitions:

Behavior Modification

A therapeutic approach that applies principles of learning to change human behavior, especially utilizing reinforcement and punishments.

Human Thoughts

Mental processes that involve the manipulation of information, such as reasoning, problem-solving, and decision-making.

Organizational Learning

The process through which an organization acquires, develops, and transfers knowledge to improve its performance.

Individual Learning

The process by which a person acquires new knowledge or skills through experience, study, or teaching.