An Adjusting Entry That Decreases Unearned Revenue and Increases Service

question 56

True/False

An adjusting entry that decreases unearned revenue and increases service revenue is a claims exchange transaction.

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Definitions:

Entity

In accounting and finance, an entity refers to any organization, company, or individual that has a separate legal existence and can engage in economic activities and transactions.

Third Parties

Individuals or entities that are involved in a transaction or agreement but are not one of the principal parties.

Return On Assets

A financial metric used to gauge how efficiently a company uses its assets to generate profit.

Common Equity

The amount of ownership interest in a corporation, represented by common stock, that is available to shareholders after debts and liabilities have been settled.