On October 15, a company received $15,000 cash as a down payment on a consulting contract. The amount was credited to Unearned Consulting Revenue. By October 31, 10% of the services required by the contract were completed. The company will record consulting revenue of $1,500 from this contract for October.
Revenue = $15,000 x 10% = $1,500

Question

Quizplus · Accepted Answer

The calculation for consulting revenue is correct. 10% of the services required by the contract were completed, so the company can recognize 10% of the revenue ($15,000) as earned revenue. 10% of $15,000 is $1,500, which is the amount of revenue that can be recognized for the month of October.

On October 15, a Company Received $15,000 Cash as a Down