How Will the Following Adjusting Journal Entry Affect the Accounting

question 48

Multiple Choice

How will the following adjusting journal entry affect the accounting equation? $$\begin{array} { | c | r | r | } \hline \text { Unearned Subscription Revenue } & 11,500 & \\\hline \text { Subscription Revenue } & & 11,500 \\\hline\end{array}$$

• A) increase assets, increase revenues
• B) increase liabilities, increase revenues
• C) decrease liabilities, increase revenues
• D) decrease liabilities, decrease revenues

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Definitions:

Molding Department

A specialized manufacturing sector responsible for shaping materials using rigid frames or models called molds.

Overhead Rate

A measure used to allocate the costs of indirect expenses to specific cost objects based on a certain base, such as labor hours or machine hours.

Plantwide Overhead Rate

A single overhead absorption rate used throughout an entire plant or company to allocate indirect costs to cost objects.

Direct Labor Hours

The total time workers spend on creating a product or service, often used as an allocation base in cost accounting.