Julie Lambert has a large consulting practice.New clients are required to pay one-half of the consulting fees up front.The balance is paid at the conclusion of the consultation.How does Lambert account for the cash received at the end of the engagement?
A)Cash
&ensp;&ensp;&ensp;Unearned Service Revenue
B)Cash
&ensp;&ensp;&ensp;&ensp;Unearned Service Revenue
Service Revenue
C)Prepaid Service Revenue
&ensp;&ensp;&ensp;&ensp; Service Revenue
D)No entry is required when the engagement is concluded.

Question

Julie Lambert has a large consulting practice.New clients are required to pay one-half of the consulting fees up front.The balance is paid at the conclusion of the consultation.How does Lambert account for the cash received at the end of the engagement?
A)Cash 
&ensp;&ensp;&ensp;Unearned Service Revenue
B)Cash 
&ensp;&ensp;&ensp;&ensp;Unearned Service Revenue
Service Revenue
C)Prepaid Service Revenue
&ensp;&ensp;&ensp;&ensp; Service Revenue
D)No entry is required when the engagement is concluded.

Quizplus · Accepted Answer

When the engagement is concluded, Lambert would recognize the remaining cash received as Service Revenue, reducing Unearned Service Revenue and increasing Cash.

Julie Lambert Has a Large Consulting Practice