Question

fill in the blank question
on december 27, a business completed a $400 service that had not yet been billed or recorded as of december 31. demonstrate the required adjusting entry of the business by completing the following sentence. the required adjusting entry would be to debit the (unearned revenue/accounts receivable/cash/service revenue) account and (debit/credit) the (unearned revenue/accounts receivable/cash/service revenue) account.

Explanation:

When a business provides a service but has not billed or recorded it, it has earned revenue (Service revenue) and has a right to collect payment (Accounts receivable). Adjusting entries for accrued revenues debit the asset account (Accounts receivable) to recognize the amount owed, and credit the revenue account (Service revenue) to recognize the earned revenue, following accrual accounting principles.

Answer:

The required adjusting entry would be to debit the Accounts receivable account and credit the Service revenue account.