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On july 30, 2018, Lemon corporation received a check in the amount of $10,000 for a...

On july 30, 2018, Lemon corporation received a check in the amount of $10,000 for a professional engagement that Lemon corporation will not perform until September 12, 2018. Lemon corporation deposits the $10,000 on the day of receipt. The $10,000 represents a (blank) on Lemons financial statements: A. Deferred revenue B. Deferred expense C. Accrued revenue D. Accrued expense.

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Answer #1

Ans : (A) Deferred Revenue

Explanation:

When Advance payment is received from customer, for product and services that company will provide in future, but not in the current period, it is referred as a Deferred Revenue.

Though it is called deferred revenue, but it is not a revenue for company as it has not earned it.

In the above case, Lemon corporation has received check on july 30,2018 for the service that they will provide in in september 12,2018.

So, it represent, option ( A) Deferred revenue.

Thus, All the other options are incorrect.

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