The Metropolitan Bakery sold and delivered $900 worth of cakes for a wedding,billing the customer on credit.Which of the following records this transaction?
A) dr Accounts Payable and cr Bakery Revenue for $900
B) dr Bakery Revenue and cr Unearned Bakery Revenue for $900
C) cr Accounts Receivable and dr Bakery Revenue for $900
D) dr Accounts Receivable and cr Bakery Revenue for $900

Question

Quizplus · Accepted Answer

The Metropolitan Bakery sold and delivered cakes and is billing the customer on credit. This means that the customer owes the bakery money and is considered an accounts receivable. Therefore, the transaction should be recorded by debiting accounts receivable and crediting bakery revenue. Option D is the only choice that follows this logic. Option A is incorrect because accounts payable is used to record money owed to suppliers, not customers. Option B is incorrect because unearned revenue is used to record revenue received in advance, not revenue that will be received in the future. Option C is incorrect because, as previously mentioned, the customer owes the bakery money and should be recorded as an accounts receivable, not a payable.

The Metropolitan Bakery Sold and Delivered $900 Worth of Cakes