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:

Price Rigidity

Characteristic of oligopolistic markets by which firms are reluctant to change prices even if costs or demands change.

Demand Curve

Depicts how the quantity demanded of a commodity varies with its price, commonly shown as a downward-sloping line on a graph, reflecting the inverse relationship between price and quantity demanded.

Price Leadership

Pattern of pricing in which one firm regularly announces price changes that other firms then match.

Oligopolistic Firms

Companies operating in a market structure characterized by a small number of firms controlling a large market share, often leading to limited competition.