During the Current Year Ended December 31,clients Paid Fees in Advance

question 142

Essay

During the current year ended December 31,clients paid fees in advance for accounting services amounting to $15,000.These fees were recorded in an account called Unearned Accounting Fees.If $3,500 of these fees remains unearned on December 31 of this year,present the December 31 adjusting entry to bring the accounts up to date.

---

Definitions:

Accounts Receivable

Customer-incurred debts to a business for goods or services for which payment is outstanding.

Inventory Turnover

A ratio showing how often a company has sold and replaced its inventory during a certain period, indicating the efficiency of inventory management.

Return On Equity

A measure of financial performance calculated by dividing net income by shareholders' equity.

Total Debt Ratio

A financial ratio that measures the extent of a company’s leverage, calculated by dividing its total liabilities by its total assets.