The Adjusting Entry to Recognize Work Completed on Unearned Revenue

question 51

Multiple Choice

The adjusting entry to recognize work completed on unearned revenue involves which of the following?

• A)An increase in assets and a decrease in liabilities
• B)An increase in liabilities and a decrease in equity
• C)A decrease in liabilities and an increase in equity
• D)A decrease in assets and a decrease in liabilities

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Definitions:

Fidelity Insurance

A form of insurance coverage that protects businesses from losses due to fraudulent acts by employees, such as embezzlement or theft.

Proportionate Share

An individual's or group's fair or equitable portion of a whole, often related to shares in a company or distribution of assets.

Professional Malpractice Insurance

A form of liability insurance that helps protect professionals from financial loss resulting from claims of negligence or incompetence.

Negligence Claims

Legal demands for compensation by individuals who have suffered injury or loss due to another party's failure to exercise the appropriate level of care.