On December 1, 2011, Debbie's Plantscape Receives $2,400 in Advance

question 73

Multiple Choice

On December 1, 2011, Debbie's Plantscape receives $2,400 in advance for an agreement to care, in equal monthly efforts, for a client's office plants during the months of December, January, and February. As of December 31, 2011, Debbie's Plantscape would have:

• A)a $1,600 liability to its client under accrual accounting, or a $2,400 liability to its client under cash-basis accounting.
• B)recognized $800 revenue under accrual accounting, or $2,400 revenue under cash-basis accounting.
• C)a $0 liability to its client under accrual accounting, or a $1,600 liability to its client under cash-basis accounting.
• D)recognized $800 cash under accrual accounting, or $2,400 cash under cash-basis accounting.

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Definitions:

Rivals

Rivals are competitors within the same industry or market vying for the same customer base or resources, often engaging in competitive strategies to gain an advantage.

Purely Competitive Producer

A firm operating in a market where there are many buyers and sellers dealing in homogeneous products, with no single entity having significant market control.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the financial gain in excess of opportunity costs.

Brand Name

The name given to a product or service by its company to distinguish it from competitors' offerings, often protected as a trademark.