How will the following adjusting journal entry affect the accounting equation? $$\begin{array} { | c | r | r | }
\hline \text { Unearned Subscription Revenue } & 11,500 & \
\hline \text { Subscription Revenue } & & 11,500 \
\hline
\end{array}$$
A) increase assets, increase revenues
B) increase liabilities, increase revenues
C) decrease liabilities, increase revenues
D) decrease liabilities, decrease revenues

Question

How will the following adjusting journal entry affect the accounting equation? $$\begin{array} { | c | r | r | } 
\hline \text { Unearned Subscription Revenue } & 11,500 & \
\hline \text { Subscription Revenue } & & 11,500 \
\hline
\end{array}$$
A) increase assets, increase revenues
B) increase liabilities, increase revenues
C) decrease liabilities, increase revenues
D) decrease liabilities, decrease revenues

Quizplus · Accepted Answer

This adjusting journal entry moves $11,500 from Unearned Subscription Revenue (a liability) to Subscription Revenue (increasing revenues). Thus, it decreases liabilities and increases revenues.

How Will the Following Adjusting Journal Entry Affect the Accounting