Zeppelin Company received cash during January for services to be provided in February. Which of the following statements does not accurately describe the impact on the financial statements when Zeppelin provides the services during February?
A) Unearned revenues decreased and were debited.
B) Revenues increased and were credited.
C)Stockholders' equity will increase.
D)Total assets will increase.

Question

Quizplus · Accepted Answer

When services are provided, unearned revenue is debited (decreased) and revenue is credited (increased), which increases stockholders' equity. However, total assets do not increase because the cash was already received in January.

Zeppelin Company Received Cash During January for Services to Be