What happens to the accounting equation when the adjustment is recorded to recognize earned revenue previously recorded as unearned revenue?

Question

Quizplus · Accepted Answer

When earned revenue is previously recorded as unearned revenue, it is recorded as a liability on the balance sheet. When the revenue is earned and recognized, the liability decreases and the stockholders' equity increases, resulting in a decrease in liabilities and an increase in stockholders' equity. Therefore, the answer is B.

What Happens to the Accounting Equation When the Adjustment Is