X Company prepares monthly financial statements. On January 1, a customer paid X

Question

X Company prepares monthly financial statements. On January 1, a customer paid X Company $38,700 in advance for cleaning services to be performed during the following four months, once in January, once in February, once in March, and once in April. What will be the result of the January 31 adjusting entry on X Company's financial statements?

a $9,675 increase in the Cash account on the Balance Sheet
a balance of $9,675 in the Deferred Revenue account on the Balance Sheet
a $9,675 increase in the Deferred Revenue account on the Balance Sheet
a $9,675 decrease in the Retained Earnings account on the Balance Sheet
revenue of $9,675 reported on the Income Statement
a $9,675 decrease in the Cash account on the Balance Sheet

Explanation / Answer

revenue of $9,675 reported on the Income Statement

In Adjusting entry for revenue recognition, we debit the deffered income account and credit the revenue account

Related Questions

Navigate

• Browse (All)
• Browse X
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.