Frenzo Furniture Co

Multiple Choice

Frenzo Furniture Co. is a manufacturer of specialty furniture. Because each piece is custom manufactured, the company requires a down payment of 40% of the estimated cost of the finished piece before production begins. Frenzo Furniture Co. should record the deposit as a

A) credit to sales revenue.
B) credit to unearned revenue.
C) credit to inventory.
D) credit to cost of goods sold.