On Dec 12, 2017, Ivory Coast, CGA, received $5,000 from a customer as an advance payment for accounting work to be done.The payment was credited to Accounting Revenue.Thirty percent of the work was performed in December 2017, with the rest to be done in January 2018, at which time the customer will be billed.The required adjusting entry at December 31, 2017 (year end)is
A)Dr.Unearned Revenue $1,500, Cr.Accounting Revenue $1,500.
B)Dr.Accounting Revenue $1,500, Cr.Unearned Revenue $1,500.
C)Dr.Accounting Revenue $3,500, Cr.Unearned Revenue $3,500.
D)Dr.Unearned Revenue $3,500, Cr.Accounting Revenue $3,500.

Question

Quizplus · Accepted Answer

The adjusting entry should recognize the portion of revenue that has not yet been earned. Since 30% of the work was completed, $1,500 is earned, and $3,500 remains unearned. Therefore, $3,500 should be moved from Accounting Revenue to Unearned Revenue.

On Dec 12, 2017, Ivory Coast, CGA, Received $5,000 from a Customer