A change in unearned revenue would be classified into which of the following categories for purposes of disclosure in the statement of cash flows?
A) Operating cash flow
B) Investing cash flow
C) Financing cash flow
D) As an item reconciling earnings and operating cash flow

Question

Quizplus · Accepted Answer

Changes in unearned revenue are not considered cash transactions, but rather a reconciliation item between earnings and operating cash flow. As such, they are reported as an adjustment in the operating activities section of the statement of cash flows. Therefore, option D is the correct answer.

A Change in Unearned Revenue Would Be Classified into Which