Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 47 - No. 29)
What is the impact on the accounting equation when unearned revenue is earned?
Increase assets, decrease liabilities.
Decrease assets, increase liabilities.
Decrease liabilities, increase equity.
Increase assets, increase equity.
Explanation
The unearned revenue (a liability) is decreased and revenue (which increases equity) is increased.
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