If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account called Unearned Legal Fees, the end-of-period adjusting entry to record the portion of those fees that has been earned is:
A) Debit Cash and credit Legal Fees Earned.
B) Debit Cash and credit Unearned Legal Fees.
C) Debit Unearned Legal Fees and credit Legal Fees Earned.
D) Debit Legal Fees Earned and credit Unearned Legal Fees.
E) Debit Unearned Legal Fees and credit Accounts Receivable.

Question

Quizplus · Accepted Answer

The adjusting entry to record the portion of unearned legal fees that has been earned during the accounting period is to debit the unearned legal fees account and credit the legal fees earned account. This is because the unearned legal fees account represents a liability that has not yet been earned, while the legal fees earned account represents revenue that has been earned during the accounting period. Therefore, the correct option is to debit Unearned Legal Fees and credit Legal Fees Earned.

If Throughout an Accounting Period the Fees for Legal Services