Unearned Service Revenue STill Unearned.

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SOSMOM

Feb 25, 2007, 09:20 PM

If the Trial balance says Unearned Service Revenue Cr. 12,560

the adjusting entry says Unearned Service Revenue still unearned, $800, how do I enter this?

CaptainForest

Feb 28, 2007, 12:22 AM

So right now, your unearned service revenue account says you have 12,560 in it.

But, you should only have 800 in it.

Therefore, the account is overstated by 12,560-800 = $11,760

Therefore, you must REMOVE 11,760 from the account.

Dr. Unearned Service Revenue 11,760
Cr. Revenue 11,760

When the unearned service revenue is decreased, it is because the amount has been earned; therefore you can recognize it as revenue.

SOSMOM

Feb 28, 2007, 01:28 PM

Ur awesome! Will you marry me? j/k