Unearned Ticket Revenue is $5,534 on the unadjusted trial balance. During the period, $3,509 of that money has now been earned. The adjusted balance for Unearned Ticket Revenue is a:
A)$3,509 debit.
B)$3,509 credit.
C)$2,025 debit.
D)$2,025 credit.

Question

Quizplus · Accepted Answer

Unearned revenue refers to the revenue earned in advance and is recognized as revenue when the services are provided or the goods are delivered to the customers. In this case, the unearned ticket revenue on the unadjusted trial balance is $5,534, of which $3,509 has now been earned. The adjusted balance for unearned ticket revenue is calculated by subtracting $3,509 (earned revenue) from the unadjusted balance of $5,534.

$5,534 - $3,509 = $2,025

Therefore, the adjusted balance for unearned ticket revenue is $2,025, and it is a credit balance because it represents a liability to the company. Hence, the correct answer is option D.

Unearned Ticket Revenue Is $5,534 on the Unadjusted Trial Balance