Waec Model Questions Vol1 2024 Financial Accounting Question 48

Practice objective / multiple choice question 48 from the 2024 Waec Model Questions Vol1 Financial Accounting examination.

Waec Model Questions Vol1 2024 Financial Accounting Objective / Multiple Choice Easy Difficulty
Question 48 WAEC_MODEL_QUESTIONS_VOL1 • 2024 • FINANCIAL_ACCOUNTING • objective

On 1 March a business receives cash of ₦200,000 from a customer for services that will be performed evenly over the next four months. According to the revenue‑recognition concept, how should this receipt be recorded in the books on 1 March, and what adjusting entry is required at the end of March?

Answer Options

A. Initial entry - Debit Cash ₦200,000; Credit Unearned Revenue ₦200,000. Adjusting entry - Debit Service Revenue ₦50,000; Credit Unearned Revenue ₦50,000.
B. Initial entry - Debit Cash ₦200,000; Credit Service Revenue ₦200,000. Adjusting entry - Debit Unearned Revenue ₦50,000; Credit Service Revenue ₦50,000.
Correct Answer C. Initial entry - Debit Cash ₦200,000; Credit Unearned Revenue ₦200,000. Adjusting entry - Debit Unearned Revenue ₦50,000; Credit Service Revenue ₦50,000.
D. Initial entry - Debit Cash ₦200,000; Credit Unearned Revenue ₦200,000. Adjusting entry - Debit Unearned Revenue ₦40,000; Credit Service Revenue ₦40,000.
Correct Answer
C
Correct Option:
Initial entry - Debit Cash ₦200,000; Credit Unearned Revenue ₦200,000. Adjusting entry - Debit Unearned Revenue ₦50,000; Credit Service Revenue ₦50,000.

About This Question

This is Waec Model Questions Vol1 2024 Financial Accounting Question 48. It is one of the objective questions from the 2024 Waec Model Questions Vol1 Financial Accounting examination.

Difficulty level: Easy .

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