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:

Out-of-round Drum

Refers to a drum brake component that has become uneven, leading to brake pulsation and compromised braking efficiency.

Brake Pedal Pulsation

A condition where the brake pedal vibrates under the foot during application, often indicating an issue with the braking system.

Brake Reassembly

The process of putting back together the components of a brake system after repair, maintenance, or inspection has been completed.

Brake Lubricant

A special grease or fluid designed to reduce friction and wear on brake system components.