Julie Lambert has a large consulting practice. New clients are required to pay o
ID: 2468774 • Letter: J
Question
Julie Lambert has a large consulting practice. New clients are required to pay one-half of the consulting fees up front. The balance is paid at the conclusion of the consultation. How does Lambert account for the cash received at the end of the engagement?
Question 28 options:
No entry is required when the engagement is concluded.
Cash XXXX
............Unearned Consulting Revenue XXXX
Prepaid Consulting Revenue XXXX
...............Earned Consulting Revenue XXXX
Cash XXXXX
Unearned Consulting Revenue XXXXX
.................... Earned Consulting Revenue XXXXX
No entry is required when the engagement is concluded.
Cash XXXX
............Unearned Consulting Revenue XXXX
Prepaid Consulting Revenue XXXX
...............Earned Consulting Revenue XXXX
Cash XXXXX
Unearned Consulting Revenue XXXXX
.................... Earned Consulting Revenue XXXXX
Explanation / Answer
Cash XXXX
............Unearned Consulting Revenue XXXX
Since half of the cash is received therfore cash needs to be debited
Since revenue is not yet earned as services are not provided therefore Unearned Consulting Revenue is credited
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