On 15 September 2016,a surveyor received an advance of $7000 from a client for future services.The work was completed to the client's satisfaction on 10 October 2016.The surveyor uses accrual accounting.
-What is the journal entry made by the surveyor on 10 October 2016?

Question

Quizplus · Accepted Answer

The journal entry on 10 October 2016 would reflect the completion of the services and the recognition of revenue earned. As the surveyor uses accrual accounting, revenue should be recognized when the service is performed, not when the cash is received. Therefore, the unearned revenue account (liability) should be decreased, and the surveying revenue account (revenue) should be increased, resulting in a journal entry of Dr Unearned revenue Cr Surveying revenue.

On 15 September 2016,a Surveyor Received an Advance of $7000