What Happens to the Accounting Equation When the Adjustment Is

question 144

Multiple Choice

What happens to the accounting equation when the adjustment is recorded to recognize earned revenue previously recorded as unearned revenue?

• A)Assets increase and liabilities increase
• B)Liabilities decrease and Stockholders' equity increases
• C)Assets decrease and liabilities decrease
• D)Stockholders' equity increases and decreases by the same amount

---

Definitions:

Standard

An established norm or requirement, often official, that specifies guidelines or criteria for procedures, products, or systems.

USB

Universal Serial Bus, a standard for cables and connectors used to connect computers and peripherals.

Optical Disc

A storage medium that uses laser technology to read and write data, examples include CDs, DVDs, and Blu-ray discs.

Nonvolatile Memory

A type of computer memory that retains its data even when the device's power is turned off, such as flash memory or ROM.