If Cash Is Received from Customers in Payment for Products

question 145

Multiple Choice

If cash is received from customers in payment for products or services that have not yet been delivered to the customers, the business would record the cash receipt as:

• A) A debit to a prepaid expense account.
• B) A debit to an unearned revenue account.
• C) No entry is required at the time of collection.
• D) A credit to a prepaid expense account.
• E) A credit to an unearned revenue account.

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Definitions:

Hawthorne

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The study of the human interface with the environment and machines.

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The social science that studies the production, distribution, and consumption of goods and services, focusing on how individuals, businesses, governments, and nations make choices on allocating resources.