Question

100 POINTS HELP How would a delivery on products listed as a $5000 Unearned Revenue credit be recorded on an accounting worksheet?

A. a $5000 Adjustment debit
B. a $5000 Trial Balance debit
C. an increase in T.B. revenue
D. a $5000 Adjusted T.B. credit

Answer 1

A. a $5000 Adjustment debit

Explanation:

The delivery of products listed as a $5000 Unearned Revenue credit would be recorded on an accounting worksheet with a $5000 Adjustment debit.

Unearned revenue is a liability account that represents payments received from customers for goods or services that have not yet been provided. When the delivery is made and the products are provided, the unearned revenue is "earned" and the revenue is recognized in the accounting records.

To record the delivery and recognize the revenue earned, the company would make an adjusting entry to decrease the unearned revenue account and increase the revenue account. Since the unearned revenue account has a credit balance, the adjusting entry would require a debit to reduce the balance. This would result in a $5000 Adjustment debit to Unearned Revenue and a $5000 Adjustment credit to Revenue.

Answer 2

Answer: A

Explanation:

If there is a $5000 Unearned Revenue credit on the accounting worksheet, it means that the company has received payment for products or services that have not yet been delivered. Therefore, when the delivery is made, an adjusting entry is needed to reflect the change in the company's financial statements.

The adjusting entry would be a debit to the Unearned Revenue account for $5000 and a credit to the Revenue account for $5000, reflecting the delivery of the products and the recognition of revenue. The entry would be recorded in the Adjustment column of the worksheet.

Therefore, the correct answer is option A, a $5000 Adjustment debit.