Question

Beetles, Inc. recorded the following journal entry on March​ 2, 2016.

Cash 12,000
Unearned Revenue 12,000

From the journal entry​ above, identify the transaction on March​ 2, 2016.

A. Beetles paid $12,000 for services to be received at a later date.
B. Beetles sold goods for $12,000 cash.
C. Beetles received $12,000 for services to be performed in a later period.
D. Beetles purchased goods worth $12,000 and signed a oneminus−year note for the same.

Answer 1

Beetles, Inc. received $12,000 for services to be performed in a later period.

Step-by-step explanation:

The journal entry suggests that Beetles, Inc. received $12,000 in cash but has not yet earned the revenue. Therefore, the correct transaction on March 2, 2016 is option C: Beetles received $12,000 for services to be performed in a later period.