Which of the following entries records the adjustment for revenue earned,but not yet collected?
A)Debit Accounts Receivable and credit Sales Revenue.
B)Debit Sales Revenue and credit Accounts Receivable.
C)Debit Deferred Revenue and credit Sales Revenue.
D)Debit Accounts Receivable and credit Deferred Revenue.

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 (with a debit)and increase the related revenue account (with a credit).

Which of the Following Entries Records the Adjustment for Revenue