Unearned revenue on the books of one company is likely to be
A) a prepaid expense on the books of the company that made the advance payment.
B) an unearned revenue on the books of the company that made the advance payment.
C) an accrued expense on the books of the company that made the advance payment.
D) an accrued revenue on the books of the company that made the advance payment.

Question

Quizplus · Accepted Answer

Unearned revenue for one company represents the amount received for goods or services not yet delivered or rendered. On the books of the company that made the advance payment, this is recorded as a prepaid expense, reflecting the future benefit they will receive.

Unearned Revenue on the Books of One Company Is Likely