An example of an adjusting entry involving a deferred revenue is
A) Cash ...............................xxx
Unearned Rental Revenue ..........xxx
B) Rental Revenue .....................xxx
Cash .............................xxx
C) Unearned Rental Revenue ............xxx
Rental Revenue ...................xxx
D) Accounts Receivable ................xxx
Sales ............................xxx

Question

An example of an adjusting entry involving a deferred revenue is
A) Cash ...............................xxx
Unearned Rental Revenue ..........xxx
B) Rental Revenue .....................xxx
Cash .............................xxx
C) Unearned Rental Revenue ............xxx
Rental Revenue ...................xxx
D) Accounts Receivable ................xxx
Sales ............................xxx

Quizplus · Accepted Answer

An adjusting entry involving a deferred revenue would involve recognizing revenue that was previously recorded as unearned revenue. Therefore, the correct option is C: Unearned Rental Revenue would be debited to reduce the liability and Rental Revenue would be credited to recognize the revenue earned. Options A, B, and D do not involve deferred revenue.

An Example of an Adjusting Entry Involving a Deferred Revenue