Question

On September 23, Reese Company received a $350 check from Mike Moluf for services to be performed in the future. The bookkeeper for Reese Company incorrectly debited Cash for $350 and credited Accounts Receivable for $350. The amounts have been posted to the ledger. To correct this entry, the bookkeeper shoulddebit Accounts Receivable $350 and credit Service Revenue $350.
debit Accounts Receivable $350 and credit Unearned Service Revenue $350.
debit Cash $350 and credit Unearned Service Revenue $350.
debit Accounts Receivable $350 and credit Cash $350.

Answer 1

Answer:

debit Accounts Receivable $350 and credit Unearned Service Revenue $350

Explanation:

The bookkeeper incorrectly made the following journal entry:

Dr Cash 350

    Cr Accounts receivable 350

The correct entry should have been:

Dr Cash 350

    Cr Unearned revenue 350

So the adjusting entry should be:

Dr Accounts receivable 350

    Cr Unearned revenue 350