If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a (n)
A) deferral
B) accrual
C) dividend
D) revenue

Question

Quizplus · Accepted Answer

The unearned subscriptions account is a liability account representing revenue received in advance for subscriptions that have not yet been fulfilled. When adjusting entries are made, revenue is recognized for the portion of subscriptions that have been fulfilled during the accounting period. If there is a balance remaining in the unearned subscriptions account, it represents revenue that has not yet been earned and should be deferred to a future accounting period. Therefore, the correct choice is A) Deferral.

If There Is a Balance in the Unearned Subscriptions Account