Unbilled Accounts Receivable Mike and Cary repair computers for small local businesses. Heavy thunderstorms during the last week of June resulted in a record number of service calls. Eager to review the results of operations for the month of June, Mike prepared an income statement and was puzzled by the lower-than-expected amount of revenues. Cary explained that he had not yet billed the company’s customers for $40,000 of work performed during the last week of the month.

Required 1. Should revenue be recorded when services are performed or when customers are billed?

Explain your answer.

2. Prepare the adjusting entry required on June 30.