Carithers Cleaning Service received advance payments from customers of $24,000 during the current year.At December 31,$5,000 of the advance payments still had not been earned.After the adjustments are recorded and posted at December 31,what will be the balances in the unearned service revenue and service revenue accounts?

Question

Quizplus · Accepted Answer

The $5,000 of advance payments that still had not been earned at December 31 represents unearned service revenue. The amount of earned service revenue would be the advance payments received of $24,000 minus the unearned service revenue of $5,000, or $19,000. Therefore, the balances in the unearned service revenue and service revenue accounts would be $5,000 and $19,000, respectively.

Carithers Cleaning Service Received Advance Payments from Customers of $24,000