Which of the following journal entries is prepared when cash is received from a customer prior to delivery of the goods or services?
A)Cash xxx
Revenue
Xxx
B)Cash xxx
Unearned revenue
Xxx
C)Unearned revenue xxx
Cash
Xxx
D)Cash

Question

Which of the following journal entries is prepared when cash is received from a customer prior to delivery of the goods or services?
A)Cash xxx
Revenue
Xxx
B)Cash xxx
Unearned revenue
Xxx
C)Unearned revenue xxx
Cash
Xxx
D)Cash

Quizplus · Accepted Answer

When cash is received from a customer prior to delivery of the goods or services, it is recorded as unearned revenue, as the revenue is not yet earned. Therefore, option B is the correct one, where cash account is debited, and unearned revenue account is credited. Option A is incorrect because the revenue is not yet earned, so it cannot be recorded. Option C is the reverse of option B, and option D is not a complete journal entry.

Which of the Following Journal Entries Is Prepared When Cash