a Cash Accounts Receivable 270 450 720 450 Uneamed Service R

a Cash. Accounts Receivable.. 270 450 720 450 Uneamed Service Revenue. 720 Service Revenue. c. Cash. 720 Accounts Receivable... 270 Uneamed Service Revenue d Cash.. 720 450 450 A lawyer collected $720 of legal fees in advance. He erroneously debited Cash for $270 and credited Accounts Receivable for $270. The correcting entry is

Solution

The correct answer is :

c. Cash ........................................ 450

Accounts Receivable.............. 270

Unearned Service Revenue.................................720

Note :

1. Cash received is $ 720 and the amount booked is $ 270,

Hence, Cash Balance of $ 720 - $ 270 which is $ 450 is recorded.

2. Accounts Receivable Account was wrongly credited and hence is debited to reverse the effect.

3. Unearned Service revenue account was not recorded and hence is now recorded.