Question

At the end of the current year, $23,550 of fees have been earned but have not...

At the end of the current year, $23,550 of fees have been earned but have not been billed to clients.

Required:
A. Journalize the December 31 adjusting entry to record the accrued fees. Refer to the Chart of Accounts for exact wording of account titles.
B. If the cash basis rather than the accrual basis had been used, would an adjusting entry have been necessary?
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Homework Answers

Answer #1

Answer for A:

Date

Account titles and explanation

Debit

Credit

Dec-31st

Accounts receivable

$ 23,550

Fees revenue

$23,550

(Entry to record accrued revenue because during current year fees not billed to client)

Answer for B:

Under Cash Basis, Accounting entry made when cash received or cash paid other than these two events, for all other transactions no entry required.

In the given case in question, there is no cash receipt made even though service provided. So, adjusting entry NOT required.

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