If a business has received cash in advance of services being performed and credits a liability account, the adjusting entry needed after the services are performed will be
A) debit Unearned Revenue and credit Cash.
B) debit Unearned Revenue and credit Sales.
C) credit Unearned Revenue and debit Sales.
D) debit Unearned Revenue and credit Accounts Receivable.

Question

Quizplus · Accepted Answer

When services are performed, the liability (Unearned Revenue) is reduced, so it is debited, and revenue (Sales) is recognized, so it is credited.

If a Business Has Received Cash in Advance of Services