A Business Maintains Subsidiary Accounts for Each of Its Customers

question 5

Multiple Choice

A business maintains subsidiary accounts for each of its customers.On May 15,the business provides services on account: $2400 to customer J.Anthony ; $4300 to customer A.Martin; and $1800 to customer S.Lee.Which journal entry is needed to record these transactions?

• A) \[\begin{array} { | l | l | r | r | }
• \hline \text { May 15 } & \text { Accounts Receivable } & 8500 & \\
• \hline & \text { Service Revenue } & & 8500 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | r | r | }
• \hline \text { May 15 } & \text { Accounts Receivable - J. Anthony } & 2400 & \\
• \hline & \text { Accounts Receivable - A. Martin } & 4300 & \\
• \hline & \text { Accounts Receivable - S. Lee } & 1800 & \\
• \hline & \text { Service Revenue } & & 8500 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | r | r | }
• \hline \text { May } 15 & \text { Service Revenue } & 8500 & \\
• \hline & \text { Accounts Receivable } & & 8500 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | r | l | r | r | }
• \hline \text { May 15 } & \text { Accounts Receivable Control } & 8500 & \\
• \hline & \text { Sales Revenue } & & 8500 \\
• \hline & & & \\
• \hline \text { May 15 } & \text { Accounts Receivable - J. Anthony } & 2400 & \\
• \hline & \text { Accounts Receivable - A. Martin } & 4300 & \\
• \hline & \text { Accounts Receivable -S. Lee } & 1800 & \\
• \hline & \text { Accounts Receivable - Control } & & 8500 \\
• \hline
• \end{array}\]

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Definitions:

Robinson-Patman Act

A United States federal law aimed at preventing anticompetitive practices by producers, specifically price discrimination.

Price Discrimination

A pricing strategy where a seller charges different prices for the same product or service to different customers, based on factors like location, age, or purchase quantity.

Sunk Cost

A cost that has already been incurred and cannot be recovered.

Intermediate Product

A product that is a result of a process but is also used as an input in the production of a final or finished product.