What are the effects on the accounting equation from the adjustment for revenue earned during the accounting period that had previously been recorded as a liability?
A)Total liabilities will increase and total stockholders' equity will decrease.
B)Total liabilities will increase and total stockholders' equity will increase.
C)Total liabilities will decrease and total stockholders' equity will increase.
D)Total liabilities will decrease and total stockholders' equity will decrease.

Question

Quizplus · Accepted Answer

The revenue earned during the current period from an amount that was received in advance is transferred out of the Deferred Revenue account and into the revenue account.Thus,liabilities decrease and revenues increase.An increase in a revenue account increases net income and,as a result,also increases total stockholders' equity.

What Are the Effects on the Accounting Equation from the Adjustment