For adjusting entries relating to accrued revenues,
A) a liability-revenue account relationship exists.
B) the adjusting entry involves a credit to an asset account and a debit to a revenue account.
C) if an adjustment is not made, assets will be overstated.
D) before adjustment, both assets and revenues are understated.

Question

Quizplus · Accepted Answer

Accrued revenues are revenues that have been earned but not yet recorded or received in cash. Before adjustment, both assets (receivables) and revenues are understated because the revenue has been earned but not yet recorded.

For Adjusting Entries Relating to Accrued Revenues