Question

AAA Consulting Services collected $6,000 cash for services to be provided in the future. Which of...

AAA Consulting Services collected $6,000 cash for services to be provided in the future. Which of the following shows how recognizing the cash receipt will affect the company’s ledger accounts?

A.

Assets = Liabilities + Stockholders’ Equity
Cash +

Prepaid
Rent

=

Unearned
Revenue

+ Common
Stock
+ Retained
Earnings
6,000 6,000

B.

Assets = Liabilities + Stockholders’ Equity
Cash +

Prepaid
Rent

=

Unearned
Revenue

+ Common
Stock
+ Retained
Earnings
(6,000) 6,000

C.

Assets = Liabilities + Stockholders’ Equity
Cash + Prepaid
Rent
= Unearned
Revenue
+ Common
Stock
+ Retained
Earnings
6,000 6,000

D.

Assets = Liabilities + Stockholders’ Equity
Cash +

Prepaid
Rent

=

Unearned
Revenue

+ Common
Stock
+ Retained
Earnings
6,000 (6,000)

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