After posting the adjusting entry to record revenues earned but not yet collected,which account will be increased?
A)Service Revenue
B)Deferred Revenue
C)Prepaid Revenue
D)Accounts Payable

Question

Quizplus · Accepted Answer

Companies that provide accounting,legal,or promotional services that span more than one month are unlikely to receive cash or bill customers until the services have been provided in full.The revenue recognition principle indicates they should be recorded during the period earned.Thus,an accrual adjustment is needed to increase Accounts Receivable on the balance sheet and increase Sales or Service Revenue on the income statement.

After Posting the Adjusting Entry to Record Revenues Earned but Not