The Year-End Adjustment to Recognize One Month's Work on the Three-Month

question 102

Multiple Choice

The year-end adjustment to recognize one month's work on the three-month contract results in a $2,000 decrease in liabilities (unearned revenue) and an increase in equity (retained earnings due to recognizing revenue) .
The following account balances were drawn from the 2016 financial statements of Grayson Company:

-Prior to closing,Syracuse Company's accounting records showed the following balances:

After closing,Syracuse's retained earnings balance would be

• A)$16,800.
• B)$23,700.
• C)$21,000.
• D)$26,400.

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