Ask Question
BusinessBusiness
16 December, 04:33

On May 1, 2017, ABC Company signed a contract to provide 1 year of marketing research services to Anderson Company starting on May 1. Anderson Company paid the full year's price of $12,000 in cash on May 1. Prepare the entry that Anderson Company should make on May 1" to record this event.

+3
Answers (1)
  1. 16 December, 05:21
    0
    Debit Cash Account $12,000

    Credit Unearned Revenues Account $12,000

    Being advance payment for marketing research services by Anderson

    Explanation:

    Revenue received before it is earned are reported as liability until it is earned, this is consistent with accrual basis of accounting. when payment for service not yet performed or goods not yet delivered is received, such a payment must not recognized in the period of payment but in the period when that service is preformed or when the goods are delivered.

    The treatment for advance payment of income is a debit to cash or bank and a credit to unearned revenues account or income received in advance account.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “On May 1, 2017, ABC Company signed a contract to provide 1 year of marketing research services to Anderson Company starting on May 1. ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
When the auditors of a nonpublic company are unable to comply with generally accepted auditing standards, they should issue an opinion that is unmodified, but include an additional emphasis-of-matter paragraph in the report. a) trueb) false
Answers (1)
Which of the following is classified as a direct labor cost? Wages of assembly-line workers Wages of a factory supervisor A) No No B) Yes Yes C) No Yes D) Yes No
Answers (1)
Which of the following give the nominal value of a variable? Check all that apply. Poornima's wage is $14.00 per hour in 2013. Poornima's wage is 2 paperback novels per hour in 2013. The price of a donut is $2.00 in 2013.
Answers (1)
Joan, is a jewelry designer who had created a unique new jewelry piece called a neacklet. It can be either a necklace or a bracelet. She would like to start her own business, but is not sure which form would suit her needs.
Answers (1)
Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $57000. If the balance of the Allowance for Doubtful Accounts is an $11400 debit before adjustment, what is the balance after adjustment?
Answers (1)
New Questions in Business
On March 14, Zest Co. accepted a 120-day, 6% note in the amount of $5,000 from AZC Co., a customer. On the due date of the note, AZC dishonors the note and fails to pay.
Answers (1)
A building with a book value of $54,000 is sold for $63,000 cash. Using the indirect method, this transaction should be shown on the statement of cash flows as an increase of a.
Answers (1)
What is a diversionary incentive? a. a temptation to switch trading partners to get a better deal b. an opportunity to change international agreements while other states are preoccupied with a conflict c. a payoff for avoiding war d.
Answers (1)
A business may decide to pay employee salaries every week, every two weeks, twice a month, or once a month. True or False?
Answers (1)
Bank of the Atlantic has liabilities of $4 million with an average maturity of two years paying interest rates of 4.0 percent annually. It has assets of $5 million with an average maturity of 5 years earning interest rates of 6.0 percent annually.
Answers (1)
Home » Business » On May 1, 2017, ABC Company signed a contract to provide 1 year of marketing research services to Anderson Company starting on May 1. Anderson Company paid the full year's price of $12,000 in cash on May 1.
Sign Up Forgot Password?