What Is the Effect of the December 31 Adjusting Entry

question 105

Multiple Choice

What is the effect of the December 31 adjusting entry to record $400 of revenues earned but not yet collected?

• A) Cash should be decreased by $400 and Sales Revenue should be increased by $400.
• B) Unearned Revenue should be increased by $400 and Sales Revenue should be decreased by $400.
• C) Accounts Receivable should be increased by $400 and Sales Revenue should be increased by $400.
• D) Accounts Receivable should be increased by $400 and Unearned Revenue should be increased by $400.

---

Definitions:

System Justification

A theory suggesting that people have a tendency to defend, uphold, and rationalize the status quo, even when it is detrimental to their own interest.

Ingroup Bias

The tendency to favor and prioritize one's own group over others in various contexts, often leading to prejudice against outgroups.

Cultural Worldview

Human-constructed shared symbolic conceptions of reality that imbue life with meaning, order, and permanence.

Prescribing Norms

The process of establishing expected behaviors or rules within a group or society, often dictating how members should act.