The Adjustment for an Accrued Revenue

question 166

Multiple Choice

The adjustment for an accrued revenue:

• A)is necessary because a business often earns revenue before they receive the cash.
• B)increases a payable account.
• C)decreases a receivable account.
• D)is necessary because a business often receives cash before it performs the service.

---

Definitions:

Coupon Bond

A debt security that pays the holder a fixed interest rate (coupon) over the bond's life, with the principal amount repaid at maturity.

Market Interest Rates

The prevailing rate of interest available in the marketplace for securities, loans, and deposits, determined by supply and demand dynamics.

Par Value

The face value of a bond or the stock value stated in the corporate charter, which is the nominal value of a security.

Semi-Annual Interest

Interest that is calculated and paid twice a year, commonly found in bonds and certain types of loans.