Determine the Account and Amount to Be Debited and the Account

question 9

Essay

Determine the account and amount to be debited and the account and amount to be credited for the following adjustment. During December, the firm received $6,000 in fees in advance and properly recorded the amount as Unearned Fees. An analysis shows that $2,000 applies to services provided in December.

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Definitions:

Insurance Policy

A contract between an individual or entity and an insurance company, outlining the terms for the insurer to compensate the insured for specific losses in exchange for premiums paid.

Journal Entries

The method by which transactions are entered into an entity's accounting records, showing the financial effects of transactions in a double-entry bookkeeping system.

Adjusted Trial Balance

An inventory of every account, including updated balances following the posting of adjusting entries, that serves as the basis for generating financial statements.

Trial Balance

A bookkeeping report that lists all the balances in each account ledger in two columns, debits and credits, ensuring that total debits equal total credits.