The correct answer is OPTION C, liability account is credited, when recording an adjusting entry for unearned revenues.
Payment recipients have a liability for unearned revenue, therefore an initial debit is made to their cash accounts and a credit goes into their unearned revenue accounts. The unearned revenue account is debited and the revenue account is credited as a result of the company's earnings (with a credit). On the balance sheet, the unearned revenue account is primarily classified as a current liability. Because recipients of payments are obligated to make payments on unearned revenue, an initial debit is made to their cash accounts and a credit is made to their unearned revenue accounts. As a direct result of the company's earnings, the unearned revenue account experiences a debit, while the revenue account experiences a credit.
To learn more about unearned revenue refer to:
https://brainly.com/question/14952769
#SPJ1
