On 27 September 2016,a builder received an advance of $50 000 from a client for future work.The work was completed to the client's satisfaction on 3 December 2016.
-What is the journal entry made by the builder on 3 December 2016?

Question

Quizplus · Accepted Answer

The journal entry made by the builder on December 3, 2016 will be to recognize the revenue earned from the completed work and to adjust the previously recorded unearned revenue. As the work has been completed to the client's satisfaction, the builder can now recognize the revenue as earned. The correct journal entry to record the earned revenue and adjust the unearned revenue would be to debit the Unearned revenue account and credit the Sales revenue account. Therefore, the correct choice is C which is Dr Unearned revenue Cr Sales revenue.

On 27 September 2016,a Builder Received an Advance of $50