When a business receives cash from a customer before earning the revenue, they have a(n):
A) bonds payable.
B) notes payable.
C) accounts payable.
D) unearned revenue.

Question

Quizplus · Accepted Answer

Unearned revenue refers to cash received from customers before the business has earned the revenue through providing the goods or services. Bond payable refers to a long-term debt issued by a company, notes payable refers to a short-term debt that a company owes to creditors, and accounts payable refers to the amount owed by a company to its suppliers for the goods or services it has received but not yet paid for.

When a Business Receives Cash from a Customer Before Earning