Cash collected from customers before goods are delivered will increase_____.
A)liabilities and increase assets
B)assets and increase revenues
C)revenues and decrease liabilities
D)liabilities and decrease revenues

Question

Quizplus · Accepted Answer

Cash collected from customers before goods are delivered is recorded as a liability (unearned revenue) because the company owes either the goods or services or a refund to the customer until the goods or services are delivered. It also increases assets because cash is an asset, and receiving cash increases the company's cash balance.

Cash Collected from Customers Before Goods Are Delivered Will Increase_____