Zeppelin Company received cash during January for services to be provided in February. Which of the following statements does not accurately describe the impact on the financial statements when Zeppelin provides the services during February?
A)Unearned revenue decreased and were debited.
B)Revenue increased and were credited.
C)Stockholders' equity will increase.
D)Total assets will increase.

Question

Quizplus · Accepted Answer

When the services are provided in February, unearned revenue is recognized as earned revenue, increasing revenue and stockholders' equity. However, total assets do not increase because the cash was already received in January.

Zeppelin Company Received Cash During January for Services to Be