An Accountant Who Keeps His Books Using Accrual Accounting Performs

question 53

Multiple Choice

An accountant who keeps his books using accrual accounting performs a service but does not receive payment at the time the service is performed.The entry made by the accountant will require a credit to:

• A) Unearned Expense
• B) Deferred Expense
• C) Service Revenue
• D) Unearned Service Revenue

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Definitions:

Correcting Entry

A journal entry made to amend a previously recorded incorrect transaction in the financial records.

Accounts Receivable

Refers to the money owed to a company by its customers for goods or services sold on credit.

Accounts Payable

Money owed by a company to its suppliers or creditors for goods or services received but not yet paid for.

Equipment

Tangible personal property that is used in operations, such as machinery, computers, and furniture, which is not intended for sale.