Question

a law firm billed a client $1,800 for work performed in the current month. which of the following general journal entries will the firm make to record this transaction? multiple choice debit accounts receivable, $1,800; credit unearned revenue, $1,800. debit cash, $1,800; credit unearned revenue, $1,800. debit legal revenue, $1,800; credit accounts receivable, $1,800. debit accounts receivable, $1,800; credit legal revenue, $1,800. debit cash, $1,800; credit accounts receivable, $1,800.

Explanation:

1. Understand the Transaction: The law firm has performed work (earned revenue) and billed the client, meaning cash hasn't been received yet (so it's a receivable).
2. Accounting Rules for Revenue Recognition: When revenue is earned but cash is not yet received, we:

• Debit Accounts Receivable (an asset account, increased because the client owes money).
• Credit Legal Revenue (a revenue account, increased because revenue is earned from providing legal services).

1. Eliminate Incorrect Options:

• Options with "Unearned Revenue" are wrong (unearned revenue is for money received before work is done, not after).
• The option with "Debit Legal Revenue" reverses the entry (revenue is credited, not debited, when earned).
• The option with "Debit Cash" is wrong (cash isn't received yet, so we use Accounts Receivable, not Cash).

Answer:

D. Debit Accounts Receivable, $1,800; credit Legal Revenue, $1,800 (assuming the last option with "Debit Cash" is incorrect and the correct one is the fourth option as per standard accounting: when a firm bills a client for work done (revenue earned but cash not yet received), we debit Accounts Receivable (to record the amount owed by the client) and credit Legal Revenue (to recognize the revenue earned from the legal services provided). The first two options use Unearned Revenue which is for unearned (not yet earned) revenue, the third option has the debits and credits reversed, and the fifth option implies cash is received which isn't the case here as it's a bill (so cash hasn't been received yet, hence Accounts Receivable not Cash). So the correct journal entry is Debit Accounts Receivable, $1,800; credit Legal Revenue, $1,800 (the fourth option among the given choices, assuming the options are labeled as A to E with the fourth being the one with Debit Accounts Receivable, $1,800; credit Legal Revenue, $1,800).