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On December 28, 1. Greasy Catering Company completed $600 of catering services. As of December 31, the customer had not been billed nor had the transaction been recorded. Demonstrate the required adjusting entry by choosing the correct statement below. Debit Catering revenue for $600. O Debit Unearned revenue for $600. O Credit Accounts receivable for $600. Debit Accounts receivable for $600.
On December 28, 1. Greasy Catering Company completed $600 of catering services. As of December 31, the customer had not been billed nor had the transaction been recorded. Demonstrate the required adjusting entry by choosing the correct statement below. Debit Catering revenue for $600. O Debit Unearned revenue for $600. O Credit Accounts receivable for $600. Debit Accounts receivable for $600.
The required adjusting entry for the situation described would be to debitAccounts receivablefor $600.When the Greasy Catering Company completed $600 worth of catering services on December 28, they had provided the service but had not yet recorded the transaction or billed the customer as of December 31.This means that the revenue has been earned but has not been recognized in thefinancial records.By debiting Accounts receivable for $600, the company acknowledges that they have an account receivable from the customer, representing the amount that is owed for theservices provided.This entry reflects the company's recognition of the revenue and the corresponding increase in the accounts receivable balance.The other options presented in the statement are not appropriate in this scenario. Debiting Catering revenue for $600 would be incorrect since the revenue has not been recognized yet.Debiting Unearned revenue for $600 would also be incorrect as the revenue has been earned and should not be classified as unearned.Crediting Accounts receivable for $600 would be incorrect as it would decrease the accounts receivable balance, which is not the appropriate treatment when recognizingrevenue.For more such questions onAccounts receivablebrainly.com/question/24848903#SPJ8...