Answer to Question #199544 in Management for Millicent

Question

An adjusting entry for income received in advanced affects _______.

Select one:

a. liabilities and income

b. assets and expenses

c. liabilities and expenses

d. assets and income

Answer 1

An adjusting entry for income received in advanced affects assets and income

When a corporation receives money before it earns it, the accounting entry is a debit to the asset Cash and a credit to a liability account such as Customer Advances or Unearned Revenues for the amount received.