The Adjustment for Revenue Received in Advance That Has Now

question 87

Multiple Choice

The adjustment for revenue received in advance that has now been earned involves a debit to

• A)Cash and a credit to Prepaid Revenue.
• B)Unearned Revenue and a credit to Revenue.
• C)Prepaid Revenue and a credit to Unearned Revenue.
• D)Revenue and a credit to Unearned Revenue.
• E)Prepaid Revenue and a credit to Cash.

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Definitions:

Supply and Demand

Economic principles stating that the price of a good is determined by its availability (supply) and consumers' desire to purchase it (demand).

Price of the Good

The amount of money required to purchase a specific product or service in the market.

Nation's Wealth

The total value of all assets and resources owned by a country, including natural resources, human capital, and financial assets.

Adam Smith

An 18th-century Scottish economist and philosopher, widely considered the father of modern economics, best known for his works on the principles of free market capitalism.