An adjusting entry for accrued revenues increases an asset account on the statement of financial position and increases a revenue account on the income statement.

Question

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When an adjusting entry is made for accrued revenues, it recognizes revenues that have been earned but not yet received or recorded. This increases an asset account (such as Accounts Receivable) on the statement of financial position, as well as a revenue account on the income statement.

An Adjusting Entry for Accrued Revenues Increases an Asset Account