Advance of performing a service


Problem:

A company that receives money in advance of performing a service:

A. debits Unearned Service Revenue and credits Accounts Payable

B. debits Cash and credits Prepaid Insurance.

C. debits Cash and credits Accounts Receivable.

D. debits Cash and credits Unearned Service Revenue.

Please justify your answer.

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Finance Basics: Advance of performing a service
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