Question
Answer the following question: GFM Inc. has a December 31 year and records annually adjusting entries. On November 1 the company received a cash deposit
Answer the following question:
GFM Inc. has a December 31 year and records annually adjusting entries. On November 1 the company received a cash deposit of $4,320 from a customer in return for services to be provided evenly over the upcoming 9 months, starting immediately. The company record the entry appropriately.
Which one of the following entries should the company record?
a) At the end record a Dr. to Deferred Revenue and a Cr. to Service Revenue for $960.
b) At year end record a Dr. to Cash and a Cr. to Service Revenue for $960.
c) On November 1 record a Dr. to Cash and a Cr. to Service Revenue of $4,320.
d) At year end record a Dr. to Deferred Revenue and a Cr. to Service Revenue for $3,360.
e) At the year end record a Dr. to Cash and a Cr. to Service Revenue for $3,360.
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