The adjusting entry to record an accrued revenue is:

a. Increase an expense; increase a liability.

b. Increase an asset; increase revenue.

c. Decrease a liability; increase revenue.

d. Increase an expense; decrease an asset.

e. Increase an expense; decrease a liability.

The correct answer is c. Decrease a liability; increase revenue.

Explanation:

For example a company receives advance of $ 500 against good to be deliver after one week. On receiving cash company will record following entry.

Debit Cash $ 500

Credit Revenue liability $ 500

On date of sale or delivery following data will be recorded.

Debit Revenue liability $ 500

Credit Revenue income $ 500