At the end of the accounting period, the Legal Fees Earned account has a normal balance of $75,000. The accountant makes two adjustments--one to accrue unbilled legal fees earned of $2,500, and the other to reduce the Unearned Legal Fees liability account by $500.
After the adjustments are posted, the Legal Fees Earned account has a balance of
A) $77,500
B) $78,000
C) $81,500
D) $82,500
E) None of the above

Question

Quizplus · Accepted Answer

The Legal Fees Earned account starts with a balance of $75,000. Adding the accrued unbilled legal fees of $2,500 increases it to $77,500. Reducing the Unearned Legal Fees liability by $500 means recognizing an additional $500 in earned revenue, bringing the total to $78,000.

At the End of the Accounting Period, the Legal Fees