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The entry to record a cash receipt from a customer when the service is to be provided in a future period involves a debit to an unearned revenue account.

Adjusting entries always affect the cash account.

The accounting equation for Dog Bed Company shows an increase in its assets and an increase in its liabilities. Which of the following transactions could have caused that effect?

It is acceptable to record cash received in advance of providing products or services to revenue accounts if an adjusting entry is made at the end of the period to bring the liability account balance to the correct unearned amount.

A business uses a credit to record:

An employer’s federal unemployment taxes (FUTA) are reported:

Jezebel Inc is a wholesaler that buys merchandise in large quantities. Its supplier’s catalog indicates a list price of $500 per unit on merchandise Jezebel intends to purchase, and offers a 30% trade discount for large quantity purchases. The cost of shipping for the merchandise is $7 per unit. Jezebel’s total purchase price per unit will be:

Reversing entries are recorded in response to external transactions that were created in error during the prior accounting period.

On July 1 Peach Co. paid $7,500 cash for management services to be performed over a two-year period. Peach follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On July 1 Peach should record:

An employer’s federal unemployment taxes (FUTA) are reported: