Asked by albandari aljuaid on May 19, 2024
Verified
A company realizes that the last two days' revenue for the month was billed but not recorded. The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.
Accounts Receivable
Financial obligations that customers or clients have to a company for products or services provided but not yet compensated for.
Fees Earned
Income received from providing services.
Adjusting Entry
An accounting record made to update the balance of accounts at the end of an accounting period to reflect the true financial position.
- Master the core principles of adjusting entries and their impact on the financial records.
- Recognize the diversity in types and motivations for adjusting entries within accounting practices, involving accrued revenues, accrued expenses, deferred revenues, and prepaid expenses.
- Recognize the principles of revenue recognition and expense matching as they relate to the preparation of financial statements.
Verified Answer
HX
Ha Xuan Son (K14 HL)May 25, 2024
Final Answer :
True
Explanation :
This adjusting entry will correctly record the revenue that was previously billed but not yet recorded, increasing Accounts Receivable (an asset account) and Fees Earned (a revenue account).
Learning Objectives
- Master the core principles of adjusting entries and their impact on the financial records.
- Recognize the diversity in types and motivations for adjusting entries within accounting practices, involving accrued revenues, accrued expenses, deferred revenues, and prepaid expenses.
- Recognize the principles of revenue recognition and expense matching as they relate to the preparation of financial statements.