contestada

Payments from customers received before performing services for the customers are recorded as

A) expenses.
B) liabilities.
C) equity.
D) dividends.
E) revenues.

Respuesta :

Answer:

B) liabilities.

Explanation:

When the payment is received from the customer before performing the services is known as unearned service revenue

The journal entry is

Cash A/c Dr XXXXX

          To Unearned Service revenue A/c XXXXX

(Being advance payment is received)

We simply debited the cash account as cash is received and credited the respective account i.e unearned service revenue