The Adjusting Entry for Unearned Revenue Always Involves A

question 69

Multiple Choice

The adjusting entry for unearned revenue always involves a:

• A) debit to a revenue account and a credit to a liability account
• B) debit to a liability account and a credit to a revenue account
• C) debit to an asset account and a credit to a liability account
• D) debit to an asset account and a credit to a revenue account

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Definitions:

Sole Proprietorships

A business structure owned by one person, where there is no legal distinction between the owner and the business entity.

Partnerships

A lawful business structure involving two or more people who divide both the management responsibilities and the profits.

Chapter 7 Bankruptcy

A legal process through which individuals or businesses can discharge their debts when they are unable to make payments to creditors.

Liquidation

The process of converting a company's assets into cash to pay off debts upon dissolution or bankruptcy.