The entry recorded by a law firm when it provides the service it previously recorded as Unearned Revenue includes a:
A) credit to Service Revenue.
B) debit to Cash.
C) credit to Accounts Receivable.
D) credit to Unearned Revenue.
E) credit to Cash.

Question

Quizplus · Accepted Answer

When a law firm provides the service it previously recorded as unearned revenue, they are recognizing revenue that has now been earned. This means that they need to move the unearned revenue from the liability account to the revenue account. Therefore, they need to credit the unearned revenue account and debit the service revenue account. Option A is the only choice that reflects this transaction.

The Entry Recorded by a Law Firm When It Provides