Explain Why a $500 Revenue Collected in Advance for Service

question 13

Essay

Explain why a $500 revenue collected in advance for service would be recorded as a debit to cash and a credit to a liability account.

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Definitions:

Opiates

A category of drugs derived from the opium poppy, used medicinally for pain relief but also capable of causing dependency.

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord, which is responsible for processing and transmitting information in the body.

Narcotic

Substances that bring relief from pain and induce sleep, often associated with dependency or addiction potential.

Cocaine

A powerful stimulant drug derived from the leaves of the coca plant, often used recreationally for its euphoric effects but illegal and associated with serious health risks.