Mary Benoit has performed $1,500 of CPA services for a client but has not billed the client as of the end of the accounting period. What is the effect of the adjustment Mary will make?

Question

Quizplus · Accepted Answer

The correct adjustment is to increase Accounts Receivable, as Mary has earned the revenue but has not yet received payment, and to increase Service Revenue, as the services have been performed and thus revenue has been earned, even though it has not yet been billed.

Mary Benoit Has Performed $1,500 of CPA Services for a Client