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

question 158

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 adjust the accounts at the end of June would be which of the following?

• A) Debit Service revenue $1,600 and credit Unearned service revenue $1,600.
• B) Debit Unearned service revenue $800 and credit Service revenue $800.
• C) Debit Unearned service revenue $2,400 and credit Service revenue $2,400.
• D) Debit Service revenue $800 and credit Accounts receivable $800.

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Definitions:

Negotiable Instrument

A financial document providing assurance for the payment of a given amount of money, either to be paid on demand or at an agreed time, with the document containing the name of the payee.

Writing Requirement

A legal condition under certain laws requiring certain contracts to be in writing to be enforceable.

Order Instrument

A financial document that is payable to a specific person or entity, as named or endorsed on the instrument.

Specific Payee

A person or entity named in a negotiable instrument to whom or to whose order the money is directed to be paid.