Question

multiple select question
select all that apply
which of the following describes accrued revenue?
□ adjustments involve increasing both an expense account and a liability account.
□ accounts receivable is usually increased when accruing revenues.
□ they refer to earnings which have been earned but not yet billed.
□ the adjustment causes an increase in an asset account and an increase in a revenue account.
□ they refer to revenues that are earned in a period, but have not been received and are unrecorded.
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Explanation:

Accrued revenue represents revenue that has been earned but not yet received or billed. The adjusting entry for accrued revenue debits an asset account (usually Accounts Receivable, increasing it) and credits a revenue account, increasing both. The first option describes accrued expenses, not accrued revenue, so it is incorrect.

Answer:

• Accounts receivable is usually increased when accruing revenues.
• They refer to earnings which have been earned but not yet billed.
• The adjustment causes an increase in an asset account and an increase in a revenue account.
• They refer to revenues that are earned in a period, but have not been received and are unrecorded.