The receipt of cash in advance from a customer
A) increases assets and stockholders' equity.
B) increases assets and decreases stockholders' equity.
C) increases assets and liabilities.
D) none of these answer choices are correct.

Question

Quizplus · Accepted Answer

Receiving cash in advance from a customer increases assets (cash) and liabilities (unearned revenue) because the company has an obligation to deliver goods or services in the future.

The Receipt of Cash in Advance from a Customer