Bayside Technical Services Signed a Contract on a Six-Month Job

question 163

Multiple Choice

Bayside Technical Services signed a contract on a six-month job for a client,starting on March 1.Bayside will collect $24,000 from its customer when the job is finished but the revenue is earned evenly over the six months.On March 31,before adjusting entries are made,Bayside's Accounts Receivable account had a debit balance of $6,000.After the March 31 monthly adjusting entry has been made,what will be the balance in Accounts Receivable?

• A) Debit balance of $4,000
• B) Credit balance of $20,000
• C) Debit balance of $10,000
• D) Debit balance of $24,000

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Definitions:

Trade Fixtures

Items of personal property brought upon the land by a tenant that are necessary to carry on the trade or business to which the premises will be devoted. Contrary to the general rule, trade fixtures remain the personal property of the tenant and are removable at the expiration of the terms of occupancy.

Quitclaim Deed

A deed that transfers to the buyer only the interest that the seller may have in a property and that contains no warranties.

Warranties of Title

Legal guarantees provided by a seller to a buyer that the seller has the right to sell the property and that the property is free from any lien or encumbrance.

Subterranean Rights

Refers to the rights to use and exploit underground resources such as minerals, oil, and natural gas located beneath a property.