If the trial balance amount of Unearned Pest Spray Revenue is $50,000, and $40,000 has been earned by the end of the fiscal period, the adjustment would be
A) debit Accounts Payable; credit Unearned Pest Spray Revenue.
B) debit Unearned Pest Spray Revenue; credit Pest Spray Revenue.
C) debit Pest Spray Revenue; credit Unearned Pest Spray Revenue.
D) debit Unearned Pest Spray Revenue; credit Cash.
E) debit Cash; credit Unearned Pest Spray Revenue.

Question

Quizplus · Accepted Answer

Unearned revenue is initially recorded as a liability. When a portion of it is earned, the correct adjustment is to decrease the liability (Unearned Pest Spray Revenue) and increase revenue (Pest Spray Revenue). This is done by debiting Unearned Pest Spray Revenue and crediting Pest Spray Revenue.

If the Trial Balance Amount of Unearned Pest Spray Revenue