27 The following account balances are taken from the December 31, 2020, financial statements of ABZ Advertising Company. The company uses accrual basis accounting. Advertising Revenue$ 46,482Cash 41,516Accounts Receivable 7,296Interest Expense 2,299Accounts Payable 5,000Operating Expenses37,460Deferred Revenue 1,178Equipment18,048Income Tax Expense2,326The following activities occurred in 2021:Performed advertising services on account, $55,000.Received cash payments on account, $10,400.Received deposits from customers for advertising services to be performed in 2022, $2,500.Made payments to suppliers on account, $5,000.Incurred $45,000 of operating expenses; $39,000 was paid in cash and $6,000 was on account and unpaid as of the end of the year.Which of the following is the journal entry that will be used to record activity #1? Multiple Choice Debit Advertising Revenue and credit Accounts Receivable for $55,000 Debit Accounts Receivable and credit Cash for $55,000 Debit Accounts Receivable and credit Advertising Revenue for $55,000 Debit Cash and credit Advertising Revenue for $55,000

In the given question, advertising service is provided on account. Therefore, both advertising…

Answered: The following account balances are…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 7E: Multiple-Step and Single-Step Income Statements, and Statement of Comprehensive Income On December...

See similar textbooks

Related questions

Question

The following account balances are taken from the December 31, 2020, financial statements of ABZ Advertising Company. The company uses accrual basis accounting.

Advertising Revenue	$ 46,482
Cash	41,516
Accounts Receivable	7,296
Interest Expense	2,299
Accounts Payable	5,000
Operating Expenses	37,460
Deferred Revenue	1,178
Equipment	18,048
Income Tax Expense	2,326

The following activities occurred in 2021:

Performed advertising services on account, $55,000.
Received cash payments on account, $10,400.
Received deposits from customers for advertising services to be performed in 2022, $2,500.
Made payments to suppliers on account, $5,000.
Incurred $45,000 of operating expenses; $39,000 was paid in cash and $6,000 was on account and unpaid as of the end of the year.

Which of the following is the journal entry that will be used to record activity #1?

Multiple Choice

Debit Advertising Revenue and credit Accounts Receivable for $55,000
Debit Accounts Receivable and credit Cash for $55,000
Debit Accounts Receivable and credit Advertising Revenue for $55,000
Debit Cash and credit Advertising Revenue for $55,000

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions