During the last month of its fiscal year, Echo Lake Resort accepted numerous deposits from customers. By the end of the month many, but not all, of these guests had completed their stays. The entry to record this event is an example of an adjusting entry:
A) To apportion a recorded cost.
B) To apportion unearned revenue.
C) To record unrecorded expenses.
D) To record unearned revenue.

Question

Quizplus · Accepted Answer

The entry is an example of an adjusting entry to apportion unearned revenue because Echo Lake Resort needs to recognize the revenue for the stays that have been completed and adjust the unearned revenue for the deposits related to stays that have not yet occurred.

During the Last Month of Its Fiscal Year, Echo Lake