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:

Performance Deficiency

The gap between an employee's actual performance and the expected or required performance standards.

Uncertain Situation

Circumstances where outcomes are unpredictable or not guaranteed.

Non-programmed Decision

Decisions made in response to unique or unexpected situations, requiring creative problem-solving.

Novel Solution

A new, innovative approach or method to solve a problem.