A company generates revenue at period end, but bills monthly in arrears. The first project revenue
is due to be recognized at the end of May and the first invoice sent to the customer in June. What
are the accounting entries at the end of May?
A.
Debit: Cost of Goods SoldCredit: Unbilled Receivables
B.
Debit: BankCredit: Revenue
C.
Debit: Unearned RevenueCredit: Revenue
D.
Debit: RevenueCredit: Accounts PayableLiability Account
E.
Debit:UnbilledReceivablesCredit: Revenue
Explanation:
Revenue
Once revenue is created, Oracle Projects runs AutoAccounting to determine the appropriate
default accounts. AutoAccounting selects all of the AutoAccounting parameters for each item or
event, determines the account coding, validates the account coding against the general ledger,
and updates each revenue distribution line with the appropriate default account.
AccountDebitCredit
Unbilled Receivables and/or Unearned Revenue200.00
Revenue200.00