Unearned Revenue should be reduced and Revenue increased for the amount of revenue during the period. (Enter only one word per blank.)
Added by Jonathan T.
Step 1
Step 1: Identify the accounts involved in the transaction, which are Unearned Revenue and Revenue. Show more…
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Anderson Accounting Services LLC provides accounting and tax preparation and consulting services. Sometimes customers only wish to have financial statements and/or tax returns prepared. Sometimes customers bundle accounting and tax preparation with consulting services to be provided over a period of time. Sometimes customers only wish to have consulting services provided over a period of time. Because Anderson is a service firm, there is no cost of goods sold associated with their services. Round all answers and do not worry about minor rounding differences. Customer is Civic Corporation and they purchase one bundled package. Date of contract: 10/1/X7 Tax consulting begins: 10/1/X7 Length of consulting services: 12 months Tax return preparation occurs over the period January through April of Length of tax preparation: 4 months Price of tax preparation to be allocated over the return preparation period Price of consulting services to be allocated over consulting period Customers are charged a lesser amount as follows for both tax and consulting Anderson Accounting Services LLC's current year end: 12/31/X7 Customers pay at the contract date for BOTH the consulting services and the preparation services
Akash M.
Adjustments for unearned revenues: a. Decrease liabilities and increase revenues b. Have an assets and revenues account relationship c. Increase assets and increase revenues d. Decrease revenues and decrease assets
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