On July1,Cooper Corporation received $20,000from Smith Industries in exchange for services performed. What accounting entries should Cooper
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Question:
On July 1, Cooper Corporation received $20,000 from Smith Industries in exchange for services performed. What accounting entries should Cooper make to record this event, and why?
a. Cooper should record a $20,000 increase in revenue along with a $20,000 increase in cash, because this way the firm's retained earnings will increase by the same amount as its assets.
b. Cooper should record a $20,000 increase in unearned service revenue along with a $20,000 increase in cash, because this way the firm's retained earnings will increase by the same amount as its assets.
c. Cooper should record a $20,000 increase in unearned service revenue along with a $20,000 increase in cash, because this way the firm's liabilities will increase by the same amount as its assets.
d. Cooper should record a $20,000 increase in revenue along with a $20,000 increase in cash, because this way the firm's liabilities will increase by the same amount as its assets.
Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
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