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An adjusting entry for unearned revenue will A : increase liabilities and increase revenues. B : increase assets and increase revenues. C : decrease revenues and decrease assets. D : decrease liabilities and increase revenues.

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hyderali230

Answer:

D : decrease liabilities and increase revenues

Explanation:

Unearned revenue is the amount received in advance against any goods or service which will be provided in future. It is a liability account. Any adjusting entry in this account will decrease it. On the other hand revenue will be recognized and revenue account balance will be increased .Journal Entry will be as follow:

                                      Dr.       Cr.

Unearned revenue     xxxx

Revenue                                   xxxx

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