In January,the Caribbean Dream Resort books and accepts a cash payment for $32,000 for vacation services to be provided during spring break in March.The journal entry recorded in January will include a debit to:
A) Cash and a credit to Unearned Revenue.
B) Accounts Payable and a credit to Service Revenue.
C) Accounts Receivable and a credit to Service Revenue.
D) Prepaid Expenses and a credit to Service Revenue.

Question

Quizplus · Accepted Answer

The resort received cash for vacation services that are yet to be provided, hence it falls under unearned revenue. Thus, a debit to cash and a credit to unearned revenue is appropriate.

In January,the Caribbean Dream Resort Books and Accepts a Cash