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.

---

Definitions:

General Equilibrium Analysis

An economic framework for understanding how supply and demand interact across multiple markets to determine prices in an entire economy.

Feedback Effects

The process where outcomes or outputs of a system loop back to influence the inputs or initial conditions, often amplifying or dampening effects in the system.

Partial Equilibrium

An analysis of equilibrium within a specific market or sector, ignoring interactions with other markets or the effects of changes in them.

General Equilibrium Analysis

An economic analysis that considers the simultaneous equilibrium of all markets in the economy.