Betty Carson has performed $500 of CPA services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Betty make?
A) Debit Cash and credit Unearned Revenue
B) Debit Accounts Receivable and credit Unearned Revenue
C) Debit Accounts Receivable and credit Service Revenue
D) Debit Unearned Revenue and credit Service Revenue

Question

Quizplus · Accepted Answer

Betty needs to recognize the revenue earned but not yet billed. Therefore, she should debit Accounts Receivable to reflect the amount owed by the client and credit Service Revenue to recognize the income earned.

Betty Carson Has Performed $500 of CPA Services for a Client