If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account called Unearned Legal Fees, the end-of-period adjusting entry to record the portion of those fees that has been earned is:
A) Debit Legal Fees Earned and credit Unearned Legal Fees.
B) Debit Unearned Legal Fees and credit Accounts Receivable.
C) Debit Cash and credit Legal Fees Earned.
D) Debit Cash and credit Unearned Legal Fees.
E) Debit Unearned Legal Fees and credit Legal Fees Earned.

Question

Quizplus · Accepted Answer

The end-of-period adjusting entry to record the portion of the legal fees that has been earned is to debit the Unearned Legal Fees account and credit the Legal Fees Earned account. This is because the fees were previously recorded as unearned revenue and are now being recognized as earned revenue. Therefore, option E is the correct choice.

If Throughout an Accounting Period the Fees for Legal Services