Final answer:
An adjusting entry debiting Accounts Receivable is an example of accrued revenue, not deferred revenue, deferred expense, or accrued expense. In another clarification, a deficit specifically refers to an annual budget shortfall, not the cumulative government debt or entitlement program cancellations. The correct answer is option: D. accrued revenue.
Step-by-step explanation:
An adjusting entry that debits Accounts Receivable typically represents an accrued revenue. Accrued revenue occurs when a company has provided goods or services but has not yet received payment for them. According to the matching principle in accounting, revenues should be recorded in the period they are earned, regardless of when the payment is actually received.
In contrast to accrued revenue, a deferred revenue would involve receiving the payment in advance, a deferred expense relates to payments made in advance for expenses, and an accrued expense represents expenses incurred but not yet paid. Therefore, the answer to the question would be accrued revenue, option D.
Furthermore, in response to the sample question provided, a deficit is defined as the annual budget shortfall between revenues and expenditures, which is option b. It is not the overall amount owed by government for past borrowing or the cancellation of an entitlement program.