A company realizes that the last two day's revenue for the month was billed but not recorded. The adjusting entry on December 31 is debit Accounts Receivable and credit Fees Earned.

Question

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This is a correct adjusting entry to record revenue that was billed but not yet recorded. By debiting Accounts Receivable, the company is recognizing that it has earned revenue but has not yet received payment. By crediting Fees Earned, the company is recognizing the revenue earned for those two days. This adjusting entry will ensure that the financial statements accurately reflect the company's revenue for the month.

A Company Realizes That the Last Two Day's Revenue for the Month