A Company Receives $10,000 In Cash For Services Yet To Be Performed. Using The Accrual Method, What's The Correct Entry To Record The Transaction?

The correct answer of this Multiple Choice Question is (D), as the company / corporation received $10,000 for cash from clients in advance and still the services against the amount received are not performed. As the services are not rendered to clients, so the company yet to be earned revenue. So, unearned revenue account is created. Under Accrual Basis of Accounting, we record a Business Transaction whether the cash is received or not. So, we debit cash account of $10,000 and credit Unearned Revenue Account of $10,000.