Question

Adams Company recorded the following journal entry on March​ 2, 2018. Cash Unearned Revenue From the journal entry​ above, identify the transaction on March​ 2, 2018. A. Adams paid for services to be received at a later date. B. Adams received for services to be performed in a later period. C. Adams sold goods for cash. D. Adams purchased goods worth and signed a oneyear note for the same amount.

Answer 1

Answer: B. Adams received for services to be performed in a later period.

Step-by-step explanation:

Unearned revenue represents cash paid by a customer for services that have not yet been done or goods that have not yet been delivered.

It is credited because it represents a liability as the company owes the customer the services or goods they paid for.

Adams here received cash for services that have not yet been performed which is why it was sent to the unearned revenue account and debited to cash to show that cash was received.