Which of the following accounts would likely be included in an accrual adjusting entry for accrued revenues?

• A. Accounts Receivable
• B. Prepaid Rent
• C. Unearned Revenue
• D. Cash

Answer: (A)

Verified step by step guidance

1. Understand the concept of accrued revenues: Accrued revenues are revenues earned but not yet received in cash or recorded. These are typically recognized in the accounting period in which they are earned, regardless of when the cash is received.
2. Identify the accounts involved in accrued revenues: Accrued revenues typically involve an asset account (such as Accounts Receivable) and a revenue account. Accounts Receivable represents the amount owed by customers for services or goods provided but not yet paid for.
3. Analyze the given options: Prepaid Rent is an asset account related to expenses paid in advance, Unearned Revenue is a liability account representing cash received before revenue is earned, and Cash is an asset account representing liquid funds. None of these are directly related to accrued revenues.
4. Determine the correct account: Accounts Receivable is the account that would likely be included in an accrual adjusting entry for accrued revenues because it represents the revenue earned but not yet received in cash.
5. Conclude the reasoning: The adjusting entry for accrued revenues typically involves debiting Accounts Receivable to record the asset and crediting a revenue account to recognize the earned revenue.