Management Services, Inc. provides services to clients. On May 1, a client prepaid Management Services $60,000 for 6-months services in advance. Management Services' general journal entry to record this transaction will include aSelect one:a. Debit to Unearned Management Fees for $60,000. b. Credit to Management Fees Earned for $60,000. c. Credit to Cash for $60,000. d. Credit to Unearned Management Fees for $60,000. e. Debit to Management Fees Earned for $60,000.

Question

Business

Leroy Mclean

23 January, 09:25

Management Services, Inc. provides services to clients. On May 1, a client prepaid Management Services $60,000 for 6-months services in advance. Management Services' general journal entry to record this transaction will include aSelect one:a. Debit to Unearned Management Fees for $60,000. b. Credit to Management Fees Earned for $60,000. c. Credit to Cash for $60,000. d. Credit to Unearned Management Fees for $60,000. e. Debit to Management Fees Earned for $60,000.

+1

Answers (1)

Know the Answer?

Marisol Jones · Answer 1

d. Credit to Unearned Management Fees for $60,000.

Explanation:

In the given question, it is mentioned that the management services provide service to clients, and one client gives the advance amount of $60,000 to the management service.

So, in case of advanced received by the customer, the journal entry would be

Cash A/c Dr $60,000

To Unearned Management Fees $60,000

(Being amount received in advance)

The asset account should be debited and the liabilities account should be credited.