When a Customer Buys Services on Account,it Should Be Recorded

question 42

Multiple Choice

When a customer buys services on account,it should be recorded as:

• A)a debit to Cash and a credit to Accounts Receivable.
• B)a credit to Revenue and a debit to Accounts Receivable.
• C)a credit to Deferred Revenue and a debit to Inventory.
• D)a debit to Cash and a credit to Accounts Payable.

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Definitions:

Output

The amount of products or services generated by a company, sector, or economic system within a specific timeframe.

Constant Returns

Refers to a situation in production where increasing the inputs by a certain factor results in output increasing by the same factor.

Production Functions

A mathematical expression that describes the relationship between inputs and the maximum output that can be produced with those inputs.

Scale

The size of a business or operation, which can impact its production cost, efficiency, and ability to compete in the market.