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?

a.Cash
Unearned Consulting Revenue
b.Cash
Unearned Consulting Revenue
Earned Consulting Revenue
c. Prepaid Consulting Revenue
Earned Consulting Revenue
d. No entry is required when the engagement is concluded.

Answer 1

b. Cash, Unearned Consulting Revenue; Earned Consulting Revenue

Step-by-step explanation:

Lambert account for the cash received at the end of the engagement as stated below

Date Account titles Debit Credit

Cash XXX

Unearned Consulting Revenue XXX

Earned Consulting Revenue XXX