JournaldrillCash received before the work
A journal entry exercise from Journaldrill. Solve it with an account picker and debit and credit fields in your browser, and it is checked the moment you submit.
The task
On December 1, Alder Event Planning signs a contract to run a corporate retreat in February. The client pays the full $6,000 fee on December 1. Record the receipt.
What this exercise teaches
Cash increases, so it is debited. Because the retreat has not been run, the $6,000 is not yet earned; Alder owes the client either the service or a refund, so Unearned Revenue, a liability, is credited. Service Revenue is recognized in February when the retreat takes place.
A hint if you get stuck
The money is in hand, but the business has not yet done anything to earn it. What does it owe the client?
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