What Effect Will This Adjustment Have on the Accounting Records $$\begin{array} { | c | c | c | } \hline \text { Unearned Revenue } & 6,375 & \\\hline \text { Fees Earned } & & 6,375 \\\hline\end{array}$$

question 119

Multiple Choice

What effect will this adjustment have on the accounting records? $$\begin{array} { | c | c | c | } \hline \text { Unearned Revenue } & 6,375 & \\\hline \text { Fees Earned } & & 6,375 \\\hline\end{array}$$

• A) increase net income
• B) increase revenues reported for the period
• C) decrease liabilities
• D) all of these are true

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Definitions:

Productive Efficiency

A situation where a firm or economy produces output at the lowest possible cost, using all its resources efficiently.

Pure Competition

A market structure characterized by a large number of small firms, a homogenous product, and very easy entry and exit from the market.

Spillovers

Effects of an economic activity that impact third parties who are not directly involved in the activity, potentially leading to externalities.

Marginal Cost

The added cost incurred from the production of an extra unit of output.