How Does the Adjusting Entry to Recognize the Portion of the Unearned

Multiple Choice

How does the adjusting entry to recognize the portion of the unearned revenue that a company earned during the accounting period affect the elements of the financial statements?

A) An increase in assets and a decrease in liabilities.
B) An increase in liabilities and a decrease in equity.
C) A decrease in liabilities and an increase in equity.
D) A decrease in assets and a decrease in liabilities.