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Question(s) / Instruction(s):

On Jan. 1 a law firm collects $10,000 cash in advance from a client.  The work on the case will be done over the next two months.  How is the cash advance recorded on Jan 1?

a)            Dr Cash, cr revenue

b)            Cr cash, dr unearned liability

c)            Dr Cash, cr unearned liability

d)            For proper matching, no journal entry will be made until the revenue is earned.

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