Entries that record cash collected before the revenues are earned are:
A) accrued revenues.
B) prepaid expenses.
C) unearned revenues.
D) accrued expenses.

Question

Quizplus · Accepted Answer

Unearned revenues are cash received from customers or clients for goods or services that have not yet been provided or earned by the company. These cash collections are recorded as a liability until the goods or services are delivered or performed, at which point they become earned revenues. Thus, unearned revenues represent an obligation to provide goods or services in the future, and they are recorded as a liability on the balance sheet.

Entries That Record Cash Collected Before the Revenues Are Earned