A baseball team records ticket revenue received in advance as Unearned Revenue. On the team's work sheet, the required adjusting entry is
A) debit Cash; credit Unearned Revenue.
B) debit Revenue; credit Unearned Revenue.
C) debit Unearned Revenue; credit Cash.
D) debit Unearned Revenue; credit Revenue.
E) debit Cash; credit Unearned Revenue Income.

Question

Quizplus · Accepted Answer

The adjusting entry for recording ticket revenue received in advance as Unearned Revenue is to debit Unearned Revenue and credit Revenue. This is because the revenue has not yet been earned until the game or event takes place, and therefore cannot be recognized as Revenue until that time. Option A and C are incorrect because they debit Cash, which is not the appropriate account to record the adjusting entry. Option B is incorrect because it would credit Unearned Revenue, which is already recorded in the account. Option E is incorrect because there is no account called "Unearned Revenue Income."

A Baseball Team Records Ticket Revenue Received in Advance as Unearned