On October 1 of the current year,a company received $4,800 for services to be performed evenly over the next six months.If no adjusting entry was made on December 31 of the current year:

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Quizplus · Accepted Answer

This is because, by December 31 of the current year, three months would have already passed since the company received the $4,800. This means that $2,400 (3 months x $800 per month) of the revenue would have been earned and should be recognized as revenue for the current year. If no adjusting entry is made, the company's net income would be understated by $2,400.

On October 1 of the Current Year,a Company Received $4,800