Adjusting Entries: Unearned Revenue Video Lessons

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Problem: Legaleese Inc. received $2,000 cash for legal services to be rendered in the future. The full amount was credited to the liability account Unearned Legal Fees. If the legal services have been rendered at the end of the accounting period and no adjusting entry is made, this would cause a. expenses to be overstated. b. net income to be overstated. c. liabilities to be understated. d. revenues to be understated.

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Problem Details

Legaleese Inc. received $2,000 cash for legal services to be rendered in the future. The full amount was credited to the liability account Unearned Legal Fees. If the legal services have been rendered at the end of the accounting period and no adjusting entry is made, this would cause

a. expenses to be overstated.

b. net income to be overstated.

c. liabilities to be understated.

d. revenues to be understated.

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What scientific concept do you need to know in order to solve this problem?

Our tutors have indicated that to solve this problem you will need to apply the Adjusting Entries: Unearned Revenue concept. You can view video lessons to learn Adjusting Entries: Unearned Revenue. Or if you need more Adjusting Entries: Unearned Revenue practice, you can also practice Adjusting Entries: Unearned Revenue practice problems.

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Our tutors rated the difficulty ofLegaleese Inc. received $2,000 cash for legal services to be...as medium difficulty.