A liability-revenue relationship exists with

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A liability-revenue relationship exists with unearned revenue adjusting entries because when a company receives payment for goods or services that have not yet been provided or earned, it creates a liability (unearned revenue) on the balance sheet. As the goods or services are provided or earned over time, the company recognizes the revenue and reduces the liability. This is done through an adjusting entry, which debits the unearned revenue account (reducing the liability) and credits the revenue account (recognizing the revenue).

A Liability-Revenue Relationship Exists with