JournaldrillAccrued service revenue
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
Sterling Bookkeeping Services completed $2,350 of payroll work for a client during December. The invoice will not be sent until January 5. Record the adjusting entry on December 31.
What this exercise teaches
Revenue is recognized in the period the service is performed, which is December. Since the client owes the money but has not been billed, Accounts Receivable is debited and Service Revenue is credited for $2,350. Unearned Revenue is for cash received before the work, which is the opposite situation.
A hint if you get stuck
The work was done in December even though no bill has gone out, so record the right to collect and the revenue.
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