When a revenue is collected and recorded in advance, it is normally accounted for as a(n) ___________ revenue.
A) accrued
B) prepaid
C) unearned
D) cash

Question

Quizplus · Accepted Answer

When revenue is collected and recorded in advance, it is considered unearned because the service or product has not yet been provided. It is considered a liability for the company and will be recognized as revenue only after the good or service has been delivered. Accrued revenue is revenue that has been earned but not yet recorded, prepaid revenue is not a valid accounting term, and cash revenue is revenue received in cash, regardless of if it is collected in advance or not.

When a Revenue Is Collected and Recorded in Advance, It