Techno Technical Services is working on a six-month job for

Techno Technical Services is working on a six-month job for a client, starting on February 1. It will collect $24,000 from its customer when the job is finished but the revenue is earned evenly over the six months

On March 31, before adjusting entries are made, Techno’s Accounts Receivable account had a debit balance of $3,000. After the March 31 monthly adjusting entry has been made, what will be the balance in Accounts Receivable?
A) Debit balance of $4,000
B) Credit balance of $20,000
C) Debit balance of $7,000
D) Debit balance of $24,000

ANSWER

C .Balance in Accounts Receivable before adjusting entry $3,000
Add Accounts Receivable of new job on March 31
$24,000 / 6 months 4,000
Ending balance in Accounts Receivable $7,000