A law firm collected $3,600 for work to be performed in the following month. Whi
ID: 2540770 • Letter: A
Question
A law firm collected $3,600 for work to be performed in the following month. Which of the following general journal entries will the firm make to record this transaction? Multiple Choice
Debit Accounts Receivable, $3,600; credit Unearned Legal Fees Revenue, $3,600.
Debit Cash, $3,600; credit Unearned Legal Fees Revenue, $3,600.
Debit Legal Fees Revenue, $3,600; credit Accounts Receivable, $3,600.
Debit Accounts Receivable, $3,600; credit Legal Fees Revenue, $3,600.
Debit Cash, $3,600; credit Accounts Receivable, $3,600.
Explanation / Answer
Correct Answer is: Debit Cash, $3,600; credit Unearned Legal Fees Revenue, $3,600.
Account Receivable will not be debited beacuse nothing is due to us from the party. Further, since the work is yet to be performed revenue account can not be credited.