Lars Richards, CPA, has performed $2,000 of accounting services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Lars make?
A) debit Cash and credit Unearned Revenue
B) debit Accounts Receivable and credit Unearned Revenue
C) debit Accounts Receivable and credit Service Revenue
D) debit Unearned Revenue and credit Service Revenue

Question

Quizplus · Accepted Answer

Lars should debit Accounts Receivable to recognize the amount owed by the client and credit Service Revenue to recognize the revenue earned during the period.

Lars Richards, CPA, Has Performed $2,000 of Accounting Services for a Client