A Business Maintains Subsidiary Accounts for Each of Its Customers $\begin{array}{ccc}\text { May } 15 &\text { Accounts Receivable } & 7,600\\&\text { Service Revenue }& & 7,600 \\\end{array}$

question 91

Multiple Choice

A business maintains subsidiary accounts for each of its customers.On May 15,the business sells services on account: $2,100 to customer J.Simmons; $4,000 to customer A.Jones; and $1,500 to customer J.Williams.Which journal entry is needed to record this sales transaction?

• A) \(\begin{array}{ccc}
• \text { May } 15 &\text { Accounts Receivable } & 7,600\\
• &\text { Service Revenue }& & 7,600 \\
• \end{array}\)
• B) \[\begin{array} { l l l }
• \text { May } 15 & \text { Accounts Receivable - J. Simmons } & 2,100 \\
• & \text { Accounts Receivable - A. Jones } & 4,000 \\
• &\text { Accounts Receivable - J. Williams } & 1,500 & \\
• &\text { Service Revenue } & & 7,600
• \end{array}\]
• C) May 15 \(\quad \) Service Revenue \(\quad 7,600\)
• \(\quad \) \(\quad \) Accounts Receivable\(\quad 7,600\)
• D) \(\begin{array}{clc}
• \text { May } 15 &\text { Accounts Receivable Control}&7,600\\
• &\text { Sales Revenue}&&7,600\\
• \\
• \text { May } 15 & \text { Accounts Receivable - J. Simmons } & 2,100 \\
• & \text { Accounts Receivable - A. Jones } & 4,000 \\
• & \text { Accounts Receivable - J. Williams } & 1,500 \\
• & \text { Accounts Receivable - Control } &&7,600
• \end{array}\)

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Definitions:

Goodwill Method

An accounting technique used to account for acquired companies over their tangible assets and liabilities, representing intangible assets like brand reputation or intellectual property.

Capital Balance

The amount of money that a person or entity has invested in a business, which may change over time due to profits, losses, and withdrawals.

Independent Appraisal

An objective evaluation of an asset's value, performed by a professional and unbiased third party, often used in financial reporting, transactions, and for legal matters.

Retires

The act of withdrawing from one's occupation or profession, often upon reaching a certain age.