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

---

Definitions:

Maintenance

Activities and practices aimed at keeping equipment, systems, or infrastructure in working condition and preventing failures.

Production Departments

Departments within an organization responsible for manufacturing or producing the products or services the company offers.

Step-Down Method

An accounting technique used to allocate overhead costs to related departments progressively, moving from departments that provide services to other departments first.

Administration Department

A functional area within an organization responsible for overseeing the operations and ensuring the business runs smoothly.