Question

On August​ 31, 2018, Allright Services received​ $3,500 in advance of performing the service. Which journal entry is needed to record the receipt of​ cash?

Answer 1

Step-by-step explanation:

In the given transaction, the amount is received in advance for performing the service, so the journal entry would be

Cash A/c Dr $3,500

To Unearned revenue $3,500

(Being amount is received in advance)

For recording the advance transactions, we have to debit the asset account i.e cash account and credit the liability account i.e. unearned revenue account.