When a new utility customer submits a deposit, the enterprise fund journal entry will include:
A) A credit to Customer Deposits.
B) A debit to Customer Deposits.
C) A debit to Sales of Water.
D) A credit to Sales of Water.

Question

Quizplus · Accepted Answer

When a new utility customer submits a deposit, it is recorded as a liability because the utility owes the amount of the deposit back to the customer under certain conditions. Therefore, the correct entry includes a credit to Customer Deposits to increase the liability account.

When a New Utility Customer Submits a Deposit, the Enterprise