Vick Vickers has a large consulting practice. New clients are required to pay one-half of the consulting fees up front. The balance is paid at the conclusion of the consultation. How does Vickers account for the cash received at the end of the engagement

Vick Vickers

Vickers accounts for the cash received at the end of the engagement by debiting Cash account and crediting Consulting Fees (Revenue).

Explanation:

Then the fees received upfront, which were earlier credited to the Deferred Service Revenue account, are then closed by a debit to the Deferred Service Revenue and a credit to the Consulting Fees (Revenue) account.  This is in line with the double-entry system of financial accounting and the new Revenue from Contracts with Customers, IFRS 15 or the ASC 606 equivalent.

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.