When an Unearned Revenue Is Initially Recorded as a Revenue

question 116

Multiple Choice

When an unearned revenue is initially recorded as a revenue, the adjusting entry has the following effect on the financial statements:

• A)Net income increases and assets decrease.
• B)Revenue increases and liabilities decrease.
• C)Net income increases and owner's equity increases.
• D)Revenue decreases and owner's equity decreases.

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Definitions:

Follow-Up

The process of maintaining contact and checking the status of a situation or individual after an initial interaction or event.

Patient Care

The services provided to patients by health professionals to promote, maintain, or restore health.

Hospital Name

The designated name identifying a specific hospital or medical facility.

Unsafe Condition

A situation or environment that poses a risk of injury, harm, or health hazards to individuals present.