On 31 December 2012, the balance in Pinnacle Exploration Company's Unearned revenue account is credit of $4 200. In January 2013, the company received an advance payment of $12 000 from a new customer for services to be performed. By 31 January, adjustments had been made to recognise $8 500 of the revenue which had been earned during January. What would be the balance in Unearned revenue on 31 January 2013?
A)$3 500 credit
B)$7 700 credit
C)$16 200 credit
D)$8 500 debit

Question

Quizplus · Accepted Answer

The initial balance was $4,200 credit. After receiving $12,000, the balance increased to $16,200 credit. Recognizing $8,500 as earned revenue reduces the unearned revenue balance to $7,700 credit.

On 31 December 2012, the Balance in Pinnacle Exploration Company's