contestada

At the end of the current year, $12,040 of fees have been earned but have not been billed to clients.
a. Journalize the adjusting entry to record the accrued fees. If an amount box does not require an entry, leave it blank.
b. If the cash basis rather than the accrual basis had been used, would an adjusting entry have been necessary?

Respuesta :

Parrain

Answer:

a.

Date                  Account Title                                          Debit                   Credit

XX-XX-XXX      Accounts Receivable                         $12,040

                         Fees earned                                                                    $12,040

b. No it would not have been.

If using the cash basis, the revenue would only be recognized when the cash is paid to the company. As the cash has not been paid, there would be no need to adjust for the revenue in the present period.

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