How will the following adjusting journal entry affect the accounting equation? $$\begin{array} { | c | r | r | }
\hline \text { Unearned Subscriptions } & 11,500 & \
\hline \text { Subscriptions Earned } & & 11,500 \
\hline
\end{array}$$
A) increase assets, increase revenues
B) increase liabilities, increase revenues
C) decrease liabilities, increase revenues
D) decrease liabilities, decrease revenues

Question

How will the following adjusting journal entry affect the accounting equation? $$\begin{array} { | c | r | r | } 
\hline \text { Unearned Subscriptions } & 11,500 & \
\hline \text { Subscriptions Earned } & & 11,500 \
\hline
\end{array}$$
A) increase assets, increase revenues
B) increase liabilities, increase revenues
C) decrease liabilities, increase revenues
D) decrease liabilities, decrease revenues

Quizplus · Accepted Answer

The adjusting entry decreases liabilities (Unearned Subscriptions) and increases revenues (Subscriptions Earned) as the company recognizes revenue that was previously recorded as a liability.

How Will the Following Adjusting Journal Entry Affect the Accounting