On June 20,2013,Parker Services Received $2,400 in Advance from a Customer

question 124

Multiple Choice

On June 20,2013,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 Unearned service revenue $2,400 and credit Cash $2,400.
• B) Debit Cash $2,400 and credit Service revenue $2,400.
• C) Debit Unearned service revenue $2,400 and credit Service revenue $2,400.
• D) Debit Cash $2,400 and credit Unearned service revenue $2,400.

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Definitions:

Writing

The act or process of creating text or symbols on a surface, typically used to communicate or record information.

Seal

A formal mode of expressing the intention to be bound by a written promise or agreement. This expression usually takes the form of signing or affixing a wax or gummed paper wafer beside the signature, or making an engraved impression on the document itself.

Privity of Estate

A legal concept that refers to the relationship between parties whose interests in a piece of property are intertwined.

Privity of Contract

A principle stating that only parties to a contract have the right to sue or be sued under the terms of the contract.