An adjusting entry that debits Accounts receivable is an example of a(n):
A) prepaid expense.
B) accrued revenue.
C) accrued expense.
D) unearned revenue.

Question

Quizplus · Accepted Answer

Accrued revenue refers to revenue that has been earned but not yet recorded. Debiting Accounts receivable means revenue has been earned but not yet received, which is an example of accrued revenue. Prepaid expenses refer to expenses that have been paid for in advance, accrued expenses refer to expenses that have been incurred but not yet paid, and unearned revenue refers to revenue that has been received in advance but not yet earned.

An Adjusting Entry That Debits Accounts Receivable Is an Example