Question

Which of the following describes accrued revenue? (Check all that apply) Multiple select question. The adjustment causes an increase in an asset account and an increase in a revenue account. Accounts receivable is usually increased when accruing revenues. Adjustments involve increasing both an expense account and a liability account. They refer to revenues that are earned in a period, but have not been received and are unrecorded. They refer to earnings which have been earned but not yet billed.

Answer 1

Answer:

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

Explanation:

Accrued revenue refers to cash earned for selling a good or delivering a service yet the cash has not been received and the transaction was not recorded in the books as revenue. This means that the cash has been earned but it has not been billed to the customer it was earned from.

When the books are being adjusted for this, the accounts receivable - which is an asset account - will increase to show that cash is owed. Revenue will also increase as this was cash earned from delivering a good or service.