A law firm billed a client $1,800 for work performed in the current month.Which of the following general journal entries will the firm make to record this transaction?
A)Debit Accounts Receivable,$1,800; credit Unearned Legal Fees Revenue,$1,800.
B)Debit Cash,$1,800; credit Unearned Legal Fees Revenue,$1,800.
C)Debit Legal Fees Revenue,$1,800; credit Accounts Receivable,$1,800.
D)Debit Accounts Receivable,$1,800; credit Legal Fees Revenue,$1,800.
E)Debit Cash,$1,800; credit Accounts Receivable,$1,800.

Question

Quizplus · Accepted Answer

The journal entry should reflect that the law firm has earned revenue from providing legal services to the client, and that the client now owes the firm for those services. Therefore, the firm should debit Accounts Receivable (to show that the client owes them money) and credit Legal Fees Revenue (to show that they earned revenue from providing legal services). Option D reflects this correctly. Option A, B, and E are incorrect because they wrongly credit Unearned Legal Fees Revenue instead of Legal Fees Revenue. Option C is incorrect because it wrongly credits Accounts Receivable instead of debiting it.

A Law Firm Billed a Client $1,800 for Work Performed