If cash is received for revenue that has not been earned, a liability is increased.

Name: If cash is received for revenue that has not been earned, a liability is increased.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When cash is received for revenue that has not yet been earned, it is recorded as a liability (such as unearned revenue or deferred revenue) because the company owes either the service or the return of the money to the payer until the obligations are fulfilled.

If Cash Is Received for Revenue That Has Not Been