The adjustment for accrued revenue typically involves which types of accounts?

Adjusting entries for accrued revenue are necessary to recognize revenue that has been earned but not yet received in cash or recorded. This process typically involves adjusting accounts that reflect the economic activity connected to the revenue earned.

In this case, the correct answer focuses on receivable and revenue accounts. When a company performs a service or delivers goods but has not yet received payment, it will record an increase in a receivable account, indicating the amount owed by customers for these services or goods. Simultaneously, the revenue account is adjusted to reflect the income that has been earned during the accounting period. This entry ensures that financial statements accurately portray the company's performance by recognizing revenue in the period in which it was earned, consistent with the accrual basis of accounting.

This method also accurately depicts the company's financial position, as the increase in receivables indicates that money is expected to come in, thus reflecting the company's growing resources due to the services rendered or goods provided. Understanding this adjustment is crucial for maintaining accurate financial records and ensuring compliance with accounting principles.