[aiya17]

Caring C.A. is conducting the audit on Blue Screen SIlver Limited. It is normal practice not to submit your account/bill/invoice until the audit is completed but by the end of the financial year 56 hours had been spent on the audit. The average hourly rate is $155. Record the adjusting entry for Blue Screen Silver Limited.

I don't get this question! Please help!

Thanks :)

[aiya17]

Sorry forgot to add that what I don't get is am I adjusting the expense or something? I don't understand this question at all :S

[morgaine300]

If you're doing the auditing, that's revenue, not expense.

What it's really saying is that you've done 56 hours of work (at 155 an hour, so you can get a total on that), but it has not been billed yet. It's accrued revenue.

Does that help to not have the unimportant jibberish?

[rehmanvohra]

Record the adjusting entry for Blue Screen Silver Limited.

I would agree with morgaine300 in so far as the Carin's accounts are concerned. However, for the client Blue Screen, no entry is necessary until the audit is complete and an invoice is received from the auditors.

[pready]

For Blue Screen it will be an expense: Your accounts will be an expense account and a Payable account.