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) \(\begin{array}{clc}
• \text { May } 15 &\text { Accounts Receivable Control}&7,600\\
• &\text { Sales Revenue}&&7,600\\
• \\
• \text { May } 15 & \text { Accounts Receivable - J. Simmons } & 2,100 \\
• & \text { Accounts Receivable - A. Jones } & 4,000 \\
• & \text { Accounts Receivable - J. Williams } & 1,500 \\
• & \text { Accounts Receivable - Control } &&7,600
• \end{array}\)

Distinguish between realized and unrealized gains and losses and their treatment for different types of investments.

Record transactions related to the purchase, sale, and holding of investment securities, including adjustments for fair value.

Interpret how investment activities are reported in financial statements, including the balance sheet and income statement impacts.

Apply knowledge of investment types and accounting methods to analyze and journalize real-world investment transactions.

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Definitions:

Unconditional Promise

A pledge or commitment that is absolute and not subject to any conditions or contingencies.

Sum Certain

A specified amount agreed upon within a contract that is clear and not subject to change.

Negotiable Instrument

A document guaranteeing the payment of a specific amount of money, either on-demand or at a set time.

Payable on Demand

A financial term indicating that a debt or other financial obligation is due for payment immediately or whenever the creditor requests it.