Duluth co. collected a $6,000 cash advance from a customer on november 1, year 1 for work to be performed over a six-month period beginning on that date. if the year-end adjustment is properly recorded, what will be the effect of the adjusting entry on duluth's year 1 financial statements?

Cash                         6000  

Cash in advance             6000

Cash in advance         2000  

Reveneu                            2000

Explanation:

A cash advance received from customer journal entry is required when a business receives a cash payment from a customer in advance of delivering goods or services. This type of situation might occur for example when a business demands cash in advance to pay for materials on a large or bespoke order or as a rental deposit on a property.

Monthrevenue recognition

nov-011.000

dic-011.000

ene-021.000

feb-021.000

mar-021.000

abr-021.000

       6.000

1. c

2. b

3. a

4. c

5. a

6. b

7. c

8. c

9.b

10. d

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