When a company receives cash before providing any products or services are provided the following results:
A) Assets and stockholders' equity increase.
B) Assets and revenue increase.
C)Liabilities and revenues increase.
D)Liabilities and assets increase.

Question

Quizplus · Accepted Answer

When a company receives cash in advance, it records the cash as an asset and a liability for unearned revenue, as the service or product has not yet been provided.

When a Company Receives Cash Before Providing Any Products or Services