If a company has earned income which has not been received in cash at the end of the accounting period an adjustment should be made which will:
A) DR an expense account and CR cash.
B) DR an income account and CR an asset account.
C) DR cash and CR a liability account.
D) DR an asset account and CR an income account.

Question

Quizplus · Accepted Answer

When a company earns income that has not yet been received in cash, it recognizes this income by debiting an asset account (accounts receivable) and crediting an income account. This reflects the increase in assets due to the earned income and records the income earned during the period.

If a Company Has Earned Income Which Has Not Been