A liability-revenue relationship exists with
A)prepaid expense adjusting entries.
B)accrued expense adjusting entries.
C)deferred revenue adjusting entries.
D)accrued revenue adjusting entries.

Question

Quizplus · Accepted Answer

A liability-revenue relationship exists with deferred revenue adjusting entries because when a company receives payment in advance for services or goods to be delivered in the future, it records this payment as a liability (deferred revenue). When the service is performed or the goods are delivered, an adjusting entry is made to decrease the liability and recognize the revenue.

A Liability-Revenue Relationship Exists with