A college has collected returnable dormitory room deposits from students. How would these deposits be reported by the college?
A) A current liability.
B) Unrestricted revenue.
C) Restricted revenue.
D) A long-term liability.

Question

Quizplus · Accepted Answer

The returnable dormitory room deposits collected by the college from students are considered a current liability until they are either refunded to the students or applied to any outstanding charges at the end of the academic year. This is because the college has an obligation to return the deposit to the students, and as such, it represents a current obligation that must be reported as a liability.

A College Has Collected Returnable Dormitory Room Deposits from Students