A transaction has been recorded in the T-accounts of Gibbs Company as follows:

Which of the following could be an explanation for this transaction?
A)Cash has been paid out to a company that will provide future services to Gibbs Company.
B)Gibbs has completed services for which they had earlier received cash in advance.
C)Gibbs has provided services to a customer on account.
D)Gibbs has received cash for service to be provided in the future.

Question

A transaction has been recorded in the T-accounts of Gibbs Company as follows:

Which of the following could be an explanation for this transaction?
A)Cash has been paid out to a company that will provide future services to Gibbs Company. 
B)Gibbs has completed services for which they had earlier received cash in advance. 
C)Gibbs has provided services to a customer on account. 
D)Gibbs has received cash for service to be provided in the future.

Quizplus · Accepted Answer

Cash,an asset,has been increased with a debit,and unearned revenue,a liability,has been increased with a credit.This indicates that Gibbs has collected cash for services to be provided in the future.

A Transaction Has Been Recorded in the T-Accounts of Gibbs