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When Fees Earned is credited because cash will be received only after the service is provided, which account is debited?
AAccounts Receivable
BCash held at the bank
CUnearned Fees liability
DWages Payable liability
Answer & Solution
Correct answer: A. Accounts Receivable
1. The text gives three timings: past, present, and future relative to the service.
2. "Future" means cash is received after the service, so the customer owes the business.
3. The debit is to Accounts Receivable, making A correct.
4. Cash (B) is the present case; Unearned Fees (C) is the past (prepaid) case; D is unrelated.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §2.4.2 "Summary of Revenues", p.80_