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) \(\begin{array}{|l|r|c|}
• \hline \text { Service Revenue } & 1,000 & \\
• \hline \text { Cash } & & 1,000 \\
• \hline
• \end{array}\)

---

Definitions:

Unproductive Spending

Expenses that do not contribute to the growth or productivity of an economy, often seen as wasteful or inefficient.

Industrially Advanced Countries

Nations characterized by high levels of industrialization, technological advancement, and higher standards of living.

Economic Growth

The increase in the value of goods and services produced by an economy over time, typically measured as the percent change in real GDP.

Temporary Workers

Individuals employed on a short-term basis, often to meet seasonal demands, cover for absent employees, or complete particular projects.