A company realizes that the last two days' revenue for the month was billed but not recorded. The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

Question

Quizplus · Accepted Answer

This adjusting entry correctly accounts for the previously unbilled revenue by debiting the Accounts Receivable account (increasing the amount owed to the company by customers) and crediting the Fees Earned account (increasing the company's revenue for the month).

A Company Realizes That the Last Two Days' Revenue for the Month