What Is the Effect on Account Balances When an Adjusting

question 93

Multiple Choice

What is the effect on account balances when an adjusting entry to record an unrecorded receivable is made?

• A) Both revenues and assets will be increased.
• B) Both revenues and assets will be decreased.
• C) Revenues will be increased, but assets will be decreased.
• D) Assets will be increased, but revenues will be decreased.

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Definitions:

Furtherance

An action taken to advance or promote a particular cause, objective, or interest.

Liquidation

The process of closing a business, selling its assets, and using the proceeds to settle its debts, with any remaining funds distributed to owners or shareholders.

Distributions-in-Kind

Non-cash assets paid out to investors or partners from a firm or fund.

Partnership's Assets

Items of value owned by a partnership that are used or can be used to conduct its business.