A roofing company collects fees when jobs are complete. The work for one customer, whose job was bid at $3,000, has been completed as of December 31, but the customer has not yet been billed. Assuming adjustments are only made at year-end, what is the adjusting entry the company would need to make on December 31, the calendar year-end?
A) Debit Roofing Fees Revenue, $3,000; credit Accounts Receivable, $3,000
B) Debit Cash, $3,000; credit Roofing Fees Revenue, $3,000
C) Debit Roofing Fees Revenue, $3,000; credit Cash, $3,000
D) Debit Accounts Receivable, $3,000; credit Roofing Fees Revenue, $3,000
E) No adjustment is required.

Question

Quizplus · Accepted Answer

The company needs to recognize the revenue earned but not yet billed by debiting Accounts Receivable and crediting Roofing Fees Revenue.

A Roofing Company Collects Fees When Jobs Are Complete