Solution: On 12/1/12, ABC Company receives $1,200 in advance for an annual contract to provide pest control services in the future over the next 12 months. Revenue will be earned equally each month. As of 12/31

Problem

On 12/1/12, ABC Company receives $1,200 in advance for an annual contract to provide pest control services in the future over the next 12 months. Revenue will be earned equally each month. As of 12/31/12 ABC Company:

a. Would have an $1,100 liability

b. Would have a $1,100 asset

c. Would have $100 expense

d. Would have $1,100 revenue