Management Services,Inc

question 140

Multiple Choice

Management Services,Inc.provides services to clients.On May 1,a client prepaid Management Services $60,000 for 6-months contract in advance.Management Services' general journal entry to record this transaction will include a

• A)Debit to Unearned Management Fees for $60,000
• B)Credit to Management Fees Earned for $60,000
• C)Credit to Cash for $60,000
• D)Credit to Unearned Management Fees for $60,000
• E)Debit to Management Fees Earned for $60,000

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Definitions:

Direct Labor

The cost of workers who are directly involved in producing goods or providing services.

Manufacturing Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor.

Merchandising

The activities involved in promoting and selling products, often used in retail to refer to the purchase of goods for resale.

Manufacturing Income Statement

A financial statement showing the income, expenses, and profits of a manufacturing company, highlighting the cost of goods manufactured.