A Company Receives Payment from One of Its Customers on August

question 26

Multiple Choice

A company receives payment from one of its customers on August 5 for services performed on July 21.Which of the following entries would be recorded if the company uses accrual basis accounting?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 1,000 & \\
• \hline \text { Accounts Receivable } & & 1,000 \\
• \hline
• \end{array}\]
• B) \(\begin{array}{|l|r|c|}
• \hline \text { Accounts Payable } & 1,000 & \\
• \hline \text { Cash } & & 1,000 \\
• \hline
• \end{array}\)
• C) \(\begin{array}{|l|r|l|}
• \hline \text { Cash } & 1,000 & \\
• \hline \text { Service Revenue } & & 1,000 \\
• \hline
• \end{array}\)
• D) \(\begin{array}{|l|r|c|}
• \hline \text { Service Revenue } & 1,000 & \\
• \hline \text { Cash } & & 1,000 \\
• \hline
• \end{array}\)

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