The Unearned Revenue adjustment can occur only in merchandising businesses.

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The Unearned Revenue adjustment can occur in both merchandising and non-merchandising businesses. Unearned Revenue is a liability account that represents money received in advance for products or services that have not been delivered or earned yet. It is common for businesses such as subscription-based companies, insurance companies, and service providers to receive payments in advance and recognize them as unearned revenue. Therefore, any business that receives payments in advance can have unearned revenue and may need to adjust it at the end of the accounting period.

The Unearned Revenue Adjustment Can Occur Only in Merchandising Businesses