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) debit an asset account and credit an income account.
B) debit an expense account and credit cash.
C) debit an income account and credit an asset account.
D) debit an asset account and credit an expense account.

Question

Quizplus · Accepted Answer

When a company earns income that has not yet been received in cash, it records this income as accrued revenue. This involves debiting an asset account (to record the receivable) and crediting an income account (to recognize the earned income), which matches choice A.

If a Company Has Earned Income Which Has Not Been