PRC-1 · Chapter 4 · Question 27 of 100
A business earned Rs. 15,000 in consulting fees during December that will not be billed or received until January. What is the adjusting entry required on December 31?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Debit Accrued Income Rs. 15,000, Credit Consulting Revenue Rs. 15,000
Explanation
To accrue income earned but not yet received, an asset is recognized (Debit Accrued Income) and the revenue is recorded (Credit Revenue).
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