Assuming Unearned Revenues Are Originally Recorded in Balance Sheet Accounts

question 131

Multiple Choice

Assuming unearned revenues are originally recorded in balance sheet accounts, the adjusting entry to record earning of unearned revenue is:

• A) Increase an expense; increase a liability.
• B) Increase an asset; increase revenue.
• C) Decrease a liability; increase revenue.
• D) Increase an expense; decrease an asset.
• E) Increase an expense; decrease a liability.

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Definitions:

Buyers

Individuals or entities that purchase goods or services for personal use, resale, or production purposes.

Unit

A standard measure or quantity used in expressing the size, amount, or extent of something, often used in economics for analysis.

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded.