Prior to the adjusting process, accrued revenue has:

Prior to the adjusting process, accrued revenue has:

a. been earned and cash received.

b. been earned and not recorded as revenue.

c. not been earned but recorded as revenue.

d. not been recorded as revenue but cash has been received.

Answer: b. been earned and not recorded as revenue.

Accrued revenue is revenue recognized by the company as earned, through delivery of goods or services, but cash has not yet been received by the company or the revenue has not been recorded in the accounts of the company. This type of income has not been formally recorded before the end of an accounting period but remains as accrued income before the adjusting process is done. The adjusting process also includes recognizing of accrued revenues in the actual period, though though the cash may not have been collected for sale of goods and services. This ensures the consolidation of financial statements revenue recognition principle from the amount of revenue received in cash hence serving the company best rather than cash receipts.