How will the following adjusting journal entry affect the accounting equation?
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? 
A) Increase assets, increase revenues 
B) Increase liabilities, increase revenues 
C) Decrease liabilities, increase revenues 
D) Decrease liabilities, decrease revenues

Quizplus · Accepted Answer

The entry is likely a recognition of revenue that was previously deferred as a liability. By decreasing the liability and increasing the revenues, the entry increased the overall equity in the accounting equation.

How Will the Following Adjusting Journal Entry Affect the Accounting