If unearned revenues are initially recorded in revenue accounts and not all the related services been performed at the end of the accounting period, the failure to make an adjusting entry will cause

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If unearned revenues are initially recorded in revenue accounts and not all the related services have been performed at the end of the accounting period, the failure to make an adjusting entry will cause revenues to be overstated. This is because the revenue was recorded before it was actually earned, and therefore should not be recognized as revenue until the services are completed or the product is delivered.

If Unearned Revenues Are Initially Recorded in Revenue Accounts and Not