Which of the Following Accounts Would Be Credited in a Proper

question 136

Multiple Choice

Which of the following accounts would be credited in a proper journal entry?

• A) Cash when it is increased
• B) Service Fees when it is increased
• C) Capital when it is decreased
• D) Accounts Payable when it is decreased

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Definitions:

Percentage-Of-Completion Method

An accounting method that recognizes revenue and expenses of long-term contracts as a percentage of work completed during the period.

Completed-Contract Method

This is an accounting method that recognizes revenues and expenses from a long-term contract only when the contract is completed.

Deferred Tax Liability

A tax obligation that is recorded on the balance sheet but not yet due, arising from temporary differences between the accounting and tax treatment of transactions.

Temporary Differences

Differences between the tax base of an asset or liability and its carrying amount in the financial statements, which will result in taxable or deductible amounts in the future.