Turnadot & Sons is a small wholesaler of decorative cast iron objects. The following events, related to a special customer order, occur as described below:

August 5, 2015: Turnadot receives the special order for 200 outdoor planters at a selling price of $50 each, including delivery at a future convenient time and location. The customer, with whom Turnadot has had a long-term, trouble-free relationship, pays $3,000 as a deposit and agrees to pay the rest on delivery. Turnadot immediately orders $4,000 worth of planters from its supplier and pays a $1,000 deposit for them.

August 27, 2015: Turnadot pays a $3,000 balance due to the supplier upon delivery of the planters to its warehouse.

September 5, 2015: The customer calls for delivery of the planters, and pays the balance of $7,000 when they arrive at the customer site.

On August 5, 2015, which one of the following accounting entries, related to the $10,000 special order, should be recorded in Turnadot's financial accounting system?

A. Debit accounts receivable $10,000; credit revenues $10,000

B.Debit cash $3,000; credit revenues $3,000

C. Debit cash $3,000; credit a liability 'advances from customers' $3,000

D. Debit cash $3,000; debit accounts receivable $7,000; credit revenues $10,000

Answer rating: 100% (QA)

Debit cash 3000 credit a liability advance from customers 3000 Explanation Because the reason ... View the full answer