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29 September, 04:12

On October 15, a company received $15,000 cash as a down payment on a consulting contract. The amount was credited to Unearned Consulting Revenue. By October 31, 10% of the services required by the contract were completed. The company will record consulting revenue of $1,500 from this contract for October. A. TrueB. False

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  1. 29 September, 04:24
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    True

    Explanation:

    The company received $15000 and credited it to the unearned consulting Revenue accounts because it had not performed any services yet.

    According to the accrual principle, the company can only report the amount earned in a period. If the company achieves the required 10% of consulting services by 31st march, it will record 10 percent of $15,000 as its income.

    10 percent of $15000 = 10/100 x $15000

    =$1500
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