PRC-1 · Chapter 4 · Question 37 of 100
At year-end, 'Omega Services' has provided IT services worth Rs. 80,000 to a client but has not yet billed them or received cash. What is the correct adjusting journal entry?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Debit Accrued Income Rs. 80,000, Credit Service Revenue Rs. 80,000
Explanation
To record income earned but not yet billed or received, an asset is recognized (Debit Accrued Income / Receivable) and the corresponding revenue is recorded (Credit Service Revenue).
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