Answer
a
Work Step by Step
When revenue is unearned, it is recorded as a liability. When the revenue is earned, the adjusting entry decreases the original liability and increases revenue.
Accounting: Tools for Business Decision Making, 5th Edition
by Kimmel, Paul D.; Weygandt, Jerry J.; Kieso, Donald E.
Published by
Wiley
ISBN 10:
1118128168
ISBN 13:
978-1-11812-816-9
Chapter 4 - Accrual Accounting Concepts - Self-Test Questions - Page 199: 7
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