Choice "A" is correct. Assets associated with unavailable revenues should be recorded by crediting deferred inflows of resources as follows:
| Debit (Dr) | Credit (Cr) |
|---|
| Accounts receivable | $ XXX | |
| Deferred inflows of resources | | $ XXX |
Choice "c" incorrect. An allowance account is used for earnings that are not expected to be collectible, not that they are simply collected subsequent to the common deadline for recognition under modified accrual (60 days).Choice "b" incorrect. Assets associated with unavailable revenues would be recorded along with deferred inflows of resources, not deferred outflows of resources.Choice "d" incorrect. Unavailable revenues are not recognized as a component of fund balance. They are recognized as a deferred inflow of resources.
