The adjusting entry to record unearned revenue that has now been earned accomplishes which of the following?
A) Increases an asset and increases an expense
B) Decreases an asset and increases an expense
C) Decreases a liability and increases a revenue
D) Decreases a liability and increases an expense

Question

Quizplus · Accepted Answer

When unearned revenue, which is initially recorded as a liability, is earned, the adjusting entry decreases the liability account (unearned revenue) and increases a revenue account to reflect the revenue that has now been earned.

The Adjusting Entry to Record Unearned Revenue That Has Now