Question

Jefferson Cleaning signed an agreement with Willis Company on December 15 to provide cleaning services every Friday. The services will be billed to Willis Company on the fifteenth of each month at a rate of $15 per hour. As of December 31, Jefferson Cleaning had provided 15 hours of cleaning services to Willis Company. Which of the following is the required adjusting entry that Jefferson Cleaning should make on December 31?A. Debit Accounts Receivable, $225; credit Fees Earned, $225B. Debit Fees Earned, $225; credit Accounts Receivable, $225C. Debit Accounts Payable, $225; credit Fees Earned, $225D. Debit Fees Earned, $225; credit Accounts Payable, $225

Answer 1

A) Debit Accounts Receivable, $225; credit Fees Earned, $225

Step-by-step explanation:

Willis owes Jefferson $225 (= 15 hours x $15 per hour).

The accounts receivable is debited because it represents money owed to Jefferson. Since it is an asset account and it increases, it should be debited.

Fees earned is a revenue account and since it increases, it should be credited.