Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Adjusting Entries: Accrued Revenues

Financial Accounting

3. Accrual Accounting Concepts

Adjusting Entries: Accrued Revenues

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Multiple Choice

Which of the following is the correct adjusting entry to record an accrued revenue at the end of an accounting period?

Debit Cash; Credit Revenue

Debit Revenue; Credit Accounts Receivable

Debit Revenue; Credit Cash

Debit Accounts Receivable; Credit Revenue

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Verified step by step guidance

Understand the concept of accrued revenue: Accrued revenue refers to income earned but not yet received in cash or recorded during the accounting period. It requires an adjusting entry to ensure the revenue is recognized in the correct period.

Identify the accounts involved: Accrued revenue typically involves Accounts Receivable (an asset account) and Revenue (a revenue account). Accounts Receivable represents the amount owed by customers, while Revenue reflects the income earned.

Determine the impact on the accounts: Since the revenue has been earned but not yet received, Accounts Receivable should be increased (debited) to reflect the amount owed by customers, and Revenue should be increased (credited) to recognize the income earned.

Write the adjusting entry: The adjusting entry to record accrued revenue is 'Debit Accounts Receivable; Credit Revenue.' This ensures the financial statements accurately reflect the earned revenue and the receivable amount.

Review the options provided: Compare the adjusting entry 'Debit Accounts Receivable; Credit Revenue' with the options listed in the problem. Confirm that this matches the correct answer provided in the question.