What is the adjusting entry for that portion of revenue received in advance which has now been earned?
A)Unearned Revenue - Debit;Cash - Credit
B)Unearned Revenue - Debit;Service Revenue - Credit
C)Service Revenue - Debit;Unearned Revenue - Credit
D)Cash - Debit;Unearned Revenue - Credit

Question

Quizplus · Accepted Answer

The adjusting entry for revenue received in advance that has now been earned is to debit the Unearned Revenue account and credit the Service Revenue account. Option B represents this adjusting entry. Option A is incorrect as it would only be used to record the initial receipt of cash for services to be provided in the future. Option C is incorrect as it would be used if revenue had not yet been earned but cash had been received. Option D is incorrect as it would be used if cash had been received for services provided in the past, but not yet recognized as revenue.

What Is the Adjusting Entry for That Portion of Revenue