Which of the following is an example of a deferred revenue?
A)A university receives cash from students prior to the start of classes.
B)A convenience store sells newspapers to its customers.
C)Both a university receives cash from students prior to the start of classes and a convenience store sells newspapers to its customers.
D)Neither a university receives cash from students prior to the start of classes nor a convenience store sells newspapers to its customers.

Question

Quizplus · Accepted Answer

Deferred revenue is the cash received in advance of providing goods or services. In this case, the university receives cash from students but hasn't yet provided the education. This creates a liability, and the revenue is recognized as the classes are taken.

Which of the Following Is an Example of a Deferred