During the last month of its fiscal year,Echo Lake Resort provided catering services for local business.Echo Lake Resort has not yet received payment from the local business.The entry to record this event is an example of an adjusting entry:
A)To apportion unearned revenue.
B)To accrue an uncollected revenue.
C)To record unrecorded expenses.
D)To record unearned revenue.

Question

Quizplus · Accepted Answer

The entry to record the uncollected revenue is an example of an adjusting entry, which involves accrual accounting. Option B, to accrue uncollected revenue, is the best choice as it records revenue that has been earned but not yet received. Option A, to apportion unearned revenue, is incorrect as the revenue has already been earned. Option C, to record unrecorded expenses, is incorrect as the event is related to revenue, not expenses. Option D, to record unearned revenue, is incorrect as the revenue has been earned but not yet received.

During the Last Month of Its Fiscal Year,Echo Lake Resort