Question

Suppose​ Fry's Electronics, Inc. provides​ $10,500 of computer support at the​ Dallas-Fort Worth store during the month of November. How would​ Fry's Electronics record this​ transaction? Assume all customers paid in cash. What financial​ statement(s) would this transaction​ affect? Select the entry that properly shows how​ Fry's Electronics would record this transaction. A. Date Accounts Debit Credit Cash 10,500 Unearned Revenue 10,500

Answer 1

Answer:

1. The following financial statements will be affected;

• Cashflow Statement - The customers all paid in cash so this will increase the cash holdings of the company and go to the Operating activities section of the statement.
• Income statement - These services provided refer to revenue for the company and so it will be counted as revenue in the income statement.
• Balance Sheet - This transaction will increase the cash account in the balance sheet. It will also increase the retained earnings account as well.

2. There are limited options for the second question but the entry should be;

November, 20XX

DR Cash ...............................................................$10,500

CR Service Revenue..........................................................$10,500