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 should?

Answer 1

Answer:

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

Explanation:

Based on the information provided within the question it can be said that in order to correct this entry the bookkeeper needs to debit Accounts Receivable $350 and credit Unearned Service Revenue $350. This is because the $350 are coming into the account (debit), but since it is for a future service it also needs to be placed as credit Unearned Services.