How is accrued revenue recognized at period end?

• A. Debit Accounts Receivable; Credit Revenue.
• B. Debit Revenue; Credit Accounts Receivable.
• C. Debit Cash; Credit Revenue.
• D. Debit Revenue; Credit Unearned Revenue.

Answer: (A)

When revenue is earned but cash hasn’t been collected yet, you recognize an asset and the revenue now. The correct entry is to debit Accounts Receivable (increase the asset representing the amount owed by customers) and credit Revenue (increase income for the period in which the service was performed or goods delivered). This follows accrual accounting, which records revenue when earned, not when cash is received, and creates a receivable for the amount due.

If cash is later received, you would reverse part of this by debiting Cash and crediting Accounts Receivable.

The other options misstate the relationships: debiting Revenue would reduce income; crediting Accounts Receivable would decrease the asset instead of recognizing an amount owed; debiting Revenue or crediting Unearned Revenue would imply different scenarios (reversing revenue or recording cash received in advance), not accrued revenue.