Ted Catering received $840 cash in advance from a customer for catering services to be provided in three months. Determine the general journal entry that Ted Catering will make to record the cash receipt. Assume the company's policy is to initially record prepaid and unearned items in balance sheet accounts.
A.
| Cash | 840? | |
| Accounts Receivable | 840? |
B.
| Accounts Receivable | 840? | |
| Catering Revenue | 840? |
C.
| Unearned Catering Revenue | 840? | |
| Catering Revenue | 840? |
D.
| Cash | 840? | |
| Catering Revenue | 840? |
E.
| Cash | 840? | |
| Unearned Catering Revenue | 840? |
Answer: E
Business
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