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Business

Accounting

company that receives money in advance of performing a service: Group of answer choices:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A company that receives money in advance of performing a service:

Group of answer choices:

debits cash and credits unearned fees.

debits unearned fees and credits accounts payable.

debits unearned fees and credits accounts receivable.

debits cash and credits accounts receivable.

Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.

Expert Solution

Meanings

Money received in advance for performing a service : Money received from a customer for services to be performed in the future. So, this money is received in advance. It's a liability of the company to provide services.

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