On 15 September 2019, a surveyor received an advance of $7 000 from a client for future services. The work was completed to the client's satisfaction on 10 October 2019. The surveyor uses accrual accounting. What is the journal entry made by the surveyor on 15 September 2019?

Question

Quizplus · Accepted Answer

The journal entry made by the surveyor on 15 September 2019 would be to debit Cash (as they received $7,000) and credit Unearned revenue (as they have not yet performed the services). This is consistent with accrual accounting principles, as revenue should only be recognized once the services have been rendered. Therefore, the correct journal entry is DR Cash CR Unearned revenue.

On 15 September 2019, a Surveyor Received an Advance of $7