What effect does "recognizing revenue at the end of the accounting period for rent previously received in advance" have on the accounting equation for the insurance company?
A) Assets increase and liabilities decrease.
B) Assets increase and stockholders' equity increases.
C) Assets decrease and liabilities decrease.
D) Liabilities decrease and stockholders' equity increases.

Question

Quizplus · Accepted Answer

Recognizing revenue for rent previously received in advance decreases liabilities (unearned revenue) and increases stockholders' equity (retained earnings) as the revenue is now earned.

What Effect Does "Recognizing Revenue at the End of the Accounting