The balance in Unearned Revenues prior to adjustment was $3,150. If the amount still unearned as of the end of the period is $1,700, the adjusting entry needed would be to:
A)debit Cash, $3,150; credit Unearned Service Revenue, $3,150.
B)debit Unearned Service Revenue, $1,700; credit Service Revenue, $1,700.
C)debit Unearned Service Revenue, $1,450; credit Service Revenue, $1,450.
D)debit Service Revenue, $1,450; credit Unearned Service Revenue, $1,450.

Question

Quizplus · Accepted Answer

The correct adjusting entry is to debit Unearned Service Revenue for the amount of revenue that has now been earned ($3,150 - $1,700 = $1,450) and credit Service Revenue for the same amount, recognizing the revenue that has been earned during the period.

The Balance in Unearned Revenues Prior to Adjustment Was $3,150