What Happens to the Accounting Equation When the Adjustment Is

question 1

Multiple Choice

What happens to the accounting equation when the adjustment is recorded to recognize earned revenue previously recorded as unearned revenue?

• A)assets increase and liabilities increase
• B)liabilities decrease and stockholders' equity increases
• C)assets decrease and liabilities decrease
• D)stockholders' equity increases and decreases by the same amount

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Definitions:

Run Chart

A graphical representation of data over time, often used in process improvement to identify trends, shifts, or patterns.

Step Change

A significant shift or transformation in processes, strategies, or performance, often leading to a new level of organizational efficiency or capability.

Scope Creep

The gradual expansion of a project's objectives, features, or deliverables beyond its original goals, often leading to increased costs and delays.

Risk

The possibility of loss, injury, or other adverse or unwelcome circumstance; a situation involving exposure to danger.