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Entity A provides bookkeeping services to Entity B for a monthly retainer fee (fixed monthly fee) of P100,000. On December 1, 20x1. Entity A receives advanced fees of P300,000 covering the months of December 20x1 to February 20x2.

Entity A provides bookkeeping services to Entity B for a monthly retainer fee (fixed monthly fee) of P100,000. On December 1, 20x1. Entity A receives advanced fees of P300,000 covering the months of December 20x1 to February 20x2.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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answer question 4 and 5
Use the following information for the next two questions: Entity A provides bookkeeping services to Entity B for a monthly retainer fee (fixed monthly fee) of P100,000. On December 1, 20x1. Entity A receives advanced fees of P300,000 covering the months of December 20x1 to February 20x2. 4. If Entity A uses the liability method of initial recording of advanced collections of income, the year-end adjustment would include a а. credit to service fees of #100,000. b. credit to service fees of P200,000. С. debit to unearned income of P200,000. d. credit to unearned income of #200,000. 5. If EntityA uses the income method of initial recording of advanced collections of income, the year-end adjustment would include a a. , debit to service fees of P100,000. b. credit to service fees of P200,000 c. debit to unearned income of P200,000 d. credit to unearned income of P200,000
Transcribed Image Text:Use the following information for the next two questions: Entity A provides bookkeeping services to Entity B for a monthly retainer fee (fixed monthly fee) of P100,000. On December 1, 20x1. Entity A receives advanced fees of P300,000 covering the months of December 20x1 to February 20x2. 4. If Entity A uses the liability method of initial recording of advanced collections of income, the year-end adjustment would include a а. credit to service fees of #100,000. b. credit to service fees of P200,000. С. debit to unearned income of P200,000. d. credit to unearned income of #200,000. 5. If EntityA uses the income method of initial recording of advanced collections of income, the year-end adjustment would include a a. , debit to service fees of P100,000. b. credit to service fees of P200,000 c. debit to unearned income of P200,000 d. credit to unearned income of P200,000
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