Which of the Following Journal Entries Would Be Recorded If $$\begin{array} { | l | r | r | } \hline \text { Cash } & 1,000 & \\\hline \text { Service revenue } & & 1,000 \\\hline\end{array}$$

question 55

Multiple Choice

Which of the following journal entries would be recorded if a business collects $1,000 cash on account from a customer for services performed at an earlier date?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 1,000 & \\
• \hline \text { Service revenue } & & 1,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Accounts receivable } & 1,000 & \\
• \hline \text { Service revenue } & & 1,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 1,000 & \\
• \hline \text { Accounts receivable } & & 1,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Service revenue } & 1,000 & \\
• \hline \text { Accounts receivable } & & 1,000 \\
• \hline
• \end{array}\]

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Definitions:

Prepaid Rent

It represents payments made for rent before the rental period has occurred, classified as a current asset on the balance sheet.

Adjusting Entry

Journal entries made at the end of an accounting period to update accounts for accruals and deferrals not captured in daily transactions.

Rent Expense

The cost incurred by a company for utilizing a property or equipment for business operations, typically recognized over the period the property is used.

Depreciation Expense

The allocated expense of a tangible asset over its useful life, reflecting its consumption, wear, and tear.