Since the revenue recognition principle requires that revenues be earned, there is no such thing as unearned revenues in accounting.

Question

Quizplus · Accepted Answer

The statement is false. Unearned revenues, also known as deferred revenues, refer to the payments received from customers for goods or services that have not yet been delivered or provided. They are considered liabilities on the balance sheet until the revenue is earned and recognized in accordance with the revenue recognition principle.

Since the Revenue Recognition Principle Requires That Revenues Be Earned