Select the best situation
prepaid expense (PE), revenue received in advance (RRA), accrued revenue (AR) or an accrued expense (AE).
-Legal fees of $1,000 were collected in advance. By year end 60 per cent were still unearned.
A) prepaid expense (PE)
B) revenue received in advance (RRA)
C)accrued revenue (AR)
D)an accrued expense (AE).

Question

Select the best situation 
prepaid expense (PE), revenue received in advance (RRA), accrued revenue (AR) or an accrued expense (AE).
-Legal fees of $1,000 were collected in advance. By year end 60 per cent were still unearned.
A) prepaid expense (PE)
B) revenue received in advance (RRA)
C)accrued revenue (AR)
D)an accrued expense (AE).

Quizplus · Accepted Answer

This situation is best described as revenue received in advance (RRA) because the legal fees were collected before the services were fully provided. At year end, 60% of the fees are still unearned, indicating that the revenue has been received but not yet earned, which is characteristic of RRA.

Select the Best Situation