Use this information to answer the following question. The trial balance for Nowwick Company appears as follows:

-If services totaling $250 had been performed but not billed,
A)the adjusting entry would include a credit to Unearned Service Revenue for $250.
B)the adjusted balance in Accounts Receivable would be $1,250.
C)the adjusted balance of Service Revenue would be $750.
D)All of these choices.

Question

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows:

-If services totaling $250 had been performed but not billed,
A)the adjusting entry would include a credit to Unearned Service Revenue for $250. 
B)the adjusted balance in Accounts Receivable would be $1,250. 
C)the adjusted balance of Service Revenue would be $750. 
D)All of these choices.

Quizplus · Accepted Answer

When services are performed but not billed, it increases Accounts Receivable and Service Revenue, indicating that the company expects to receive payment in the future for these services. The specific impact on Accounts Receivable or Service Revenue balances cannot be determined without additional information, but option B is correct in the context that it reflects an action consistent with recognizing revenue that has been earned but not yet billed. Options A and C provide specific outcomes without enough context to confirm their accuracy, and not all provided choices are correct, making D incorrect.

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