A Business Receives $40,000 for Services That It Will Perform

question 131

Multiple Choice

A business receives $40,000 for services that it will perform over the next four months.Which of the following accounts is credited?

• A) Cash
• B) Accounts Payable
• C) Service Revenue
• D) Unearned Revenue

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Definitions:

Zero-Coupon Bond

A bond that does not pay interest during its life and is sold at a discount from its face value.

Face Value

The nominal value printed on a financial instrument like a bond or stock certificate, indicating its legal worth at issuance.

Implicit Interest

The interest rate that is not explicitly stated but inferred from the difference between the purchase price and the total payments to be made in a financing transaction.

Zero-Coupon Bond

A type of bond that does not pay periodic interest and is sold at a discount from its face value, with the full face value being paid at maturity.