Unearned revenues are generally:
A)Revenues that have been earned and received in cash.
B)Revenues that have been earned but not yet collected in cash.
C)Liabilities created when a customer pays in advance for products or services before the revenue is earned.
D)Recorded as an asset in the accounting records.
E)Increases to owners' capital.

Question

Quizplus · Accepted Answer

Unearned revenues are liabilities created when a customer pays in advance for products or services before the revenue is earned. This means that the revenue has not yet been earned and therefore cannot be recognized as revenue on the income statement. It is recorded as a liability until the product or service is provided or the event occurs, at which point the revenue can be recognized.

Unearned Revenues Are Generally