Under the accrual basis of accounting - if cash has been received before the revenue has been earned, which of the following journal entries should be recorded? A) Debit Cash, Credit Unearned Revenue. B) Debit Cash, Credit Sales Revenue. C) Debit Unearned Revenue, Credit Cash. D) Debit Cash, Credit Accounts Receivable.
Under the accrual basis of accounting - if cash has been received before the revenue has been earned, which of the following journal entries should be recorded? A) Debit Cash, Credit Unearned Revenue. B) Debit Cash, Credit Sales Revenue. C) Debit Unearned Revenue, Credit Cash. D) Debit Cash, Credit Accounts Receivable.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Under the accrual basis of accounting - if cash has been received before the revenue has been earned, which of the following
A) Debit Cash,
Credit Unearned Revenue.
B) Debit Cash,
Credit Sales Revenue.
C) Debit Unearned Revenue,
Credit Cash.
D) Debit Cash,
Credit
Expert Solution
Step 1
When the cash is received for which revenue is yet to be earned then the cash account is debited and the liability in the name of unearned revenue is credited.
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