On July 7,2012,Saints Inc

question 14

Multiple Choice

On July 7,2012,Saints Inc.received $10,000 in cash from a customer for services to be provided on October 10,2012.Which of the following describes how the transaction should be recorded on July 7,2012?

• A)Debit Cash $10,000,credit Service Revenue $10,000.
• B)Debit Accounts Receivable $10,000,credit Service Revenue $10,000.
• C)Debit Cash $10,000,credit Unearned Revenue $10,000.
• D)Debit Unearned Revenue $10,000,credit Cash $10,000.

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Definitions:

Financing Activities

Activities that result in changes in the size and composition of the contributed equity and borrowings of the entity.

Loss on Sale

A situation where the proceeds from selling an asset are less than its book value, resulting in a financial loss for the entity.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Operating Activities

Activities related to the core business functions of a company, such as selling goods or services and managing expenses.