Online Computer Services Follows Accrual-Based Accounting

Multiple Choice

Online Computer Services follows accrual-based accounting. It receives $7,000 in advance for services to be performed in both the current and following fiscal period. Which of the following entries records this transaction?

A) A debit to Cash and a credit to Service Revenue
B) A debit to Cash and a credit to Accounts Payable
C) A debit to Cash and a credit to Unearned Service Revenue
D) A debit to Unearned Service Revenue and a credit to Service Revenue
E) A debit to Service Revenue and a credit to Unearned Service Revenue