Question

Service revenue earned but not yet collected or billed by the end of the period was $200; therefore, the adjusting entry should be: Debit--Accounts receivable, $200; Credit--Unearned service revenue, $200. True or False

Answer 1

Service revenue earned = $200

Service revenue was earned but no cash was collected.

It will have the following effects:

- Assets will increase in the form of accounts receivable.

- Service revenue will increase.

Hence, the following adjusting entry is needed:

General Journal	Debit	Credit
Accounts receivable	$200
Service revenue		$200
( To record service revenue earned)

Since the revenue has been earned, it cannot be termed as unearned service revenue.

The given statement is false.

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