Question by Allison Mott: What is the adjustment in the amount of unearned fees account?
The balance in the earned fees account, before adjustment at the end os the year, is $ 27,300. What is the adjustment if the amount of unearned fees at the end of the year is $ 14,650? Indicate each amount affected, whether the account is increased of decreased, and the amount of the increase or decrease.
Can any of you tell me what to do because accounting is not my best class?
Best answer:
Answer by Marc
First off, know this; the unearned fees account has a normal credit balance. It is a liability for the company as they were paid in advance for some service to be performed in the future.
What is the adjustment if the amount of unearned fees at the end of the year is $ 14,650?
$ 27,300 – $ 14,650 = $ 12,650
Indicate each account affected, whether the account is increased of decreased, and the amount of the increase or decrease.
The entry would be:
Debit Unearned Fees $ 12,650 (this decreases this account)
Credit Fees Revenue $ 12,650 (this increases this account)
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