Question

Cakery bakery receives $1,000 from a customer on august 5, 2016 for a wedding cake to be delivered on september 19, 2016. what would cakery bakery record on their books when they receive this payment?

Answer 1

The correct answer is to debit Cash (an asset) for $1,000 as the company now has the cash and credit Deferred Revenue (a liability) for $1,000 as the company now has an obligation to provide services in the future.

What is Revenue?

The total amount of income earned by the sale of goods and services connected to the principal operations of the firm is referred to as revenue in accounting. Commercial revenue is often known as sales or turnover. Some businesses make money by charging interest, royalties, or other fees.

The overall cost of making and distributing a product or service to consumers is referred to as the cost of revenue. The cost of revenue is disclosed in a company's income statement. It is intended to show the direct costs related with the goods and services offered by the company.

To know more about Revenuefollow the link:

brainly.com/question/16232387

#SPJ4