Question

Jones Financial Services Company performed accounting services for a client in December. A bill was mailed to the client on December 30. The company received the​ client's check by mail on January 5. Which of the following accounts should appear on the income statement for the year ended December 31 as related to the services​ performed?

A) Unearned Revenue
B) Prepaid Expen inDeember.
C) Accounts Receivable
D) None, there is no entry in December.

Answer 1

The correct answer is C) Accounts Receivable.

Step-by-step explanation:

Accounts receivable is the name of the account where the increases and cuts linked to the sale of different items to products or services are recorded. This account is made up of bills of exchange, credit titles and promissory notes in favor of the company.

Accounts receivable, therefore, grant the right to the organization to require subscribers of credit titles to pay the documented debt. This is a future benefit accredited by the account holder.

Among the accounts receivable, one can speak of accounts receivable from the client (when the latter takes credit with the company) and accounts receivable from employees and officials (record salary advances and other criteria). Another distinction between accounts receivable is given by the time in which said credit can be converted into cash (short-term accounts receivable, long-term accounts receivable, etc.).