Assuming Unearned Revenues Are Originally Recorded in Balance Sheet Accounts

question 131

Multiple Choice

Assuming unearned revenues are originally recorded in balance sheet accounts, the adjusting entry to record earning of unearned revenue is:

• A) Increase an expense; increase a liability.
• B) Increase an asset; increase revenue.
• C) Decrease a liability; increase revenue.
• D) Increase an expense; decrease an asset.
• E) Increase an expense; decrease a liability.

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Definitions:

Material Costs

The expenses associated with the raw materials and components used in the making of a product.

Internal Data

Data generated within an organization from its operational activities, used for analysis and decision-making processes.

Nominal Data

Data categorized into discrete groups or categories that cannot be ordered in a meaningful way, used in statistical analysis to classify qualitative variables.

Routine Collection

The systematic and regular gathering of data or samples for analysis.