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

Question

Quizplus · Accepted Answer

Unearned revenues are cash collected before the revenues are earned. This is because the company has not yet performed the services or delivered the goods for which the cash was received. Therefore, it is considered a liability until it is earned. Accrued revenues, on the other hand, are revenues earned but not yet received in cash. Accrued expenses are expenses incurred but not yet paid in cash, and prepaid expenses are expenses paid in advance but not yet used.

Entries That Record Cash Collected Before the Revenues Are Earned