David Debit Has Performed $700 of Accounting Services for a Client

question 98

Multiple Choice

David Debit has performed $700 of accounting services for a client but has not yet billed the client at the end of the accounting period.What adjusting entry must David prepare?

• A)Debit Cash and credit Unearned Revenue.
• B)Debit Accounts Receivable and credit Unearned Revenue.
• C)Debit Accounts Receivable and credit Service Revenue.
• D)Debit Unearned Revenue and credit Service Revenue.

---

Definitions:

Reciprocal Services Method

An accounting method used to allocate costs between departments of an organization that provide services to each other.

Support Department Costs

Expenses incurred by service departments that do not directly produce goods but support other departments that do.

Total Janitorial Costs

The complete expenses associated with cleaning and maintaining a facility.

Market Value

The current price at which an asset or service can be bought or sold in the open market, subject to supply and demand.