The adjustment for an accrued revenue:

Question

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Accrued revenue refers to revenue that has been earned but has not yet been received in cash or recorded in the accounts. Therefore, an adjustment is needed to record the revenue as well as to reflect the corresponding accounts receivable. This adjustment increases both revenue and accounts receivable, which are asset accounts. Option B and C are incorrect because accrued revenue does not directly affect payable or receivable accounts. Option D is also incorrect because if a business receives cash before performing a service, it should be recorded as unearned revenue, not accrued revenue.

The Adjustment for an Accrued Revenue