When a business receives cash from a customer before earning the revenue, they have a(n):

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When a business receives cash from a customer before earning the revenue, they have unearned revenue. This represents an obligation that the business owes to the customer and will be recognized as revenue when the obligation is fulfilled. Contingent liability refers to a potential liability and account payable refers to an obligation owed by the business to a supplier. Prepaid revenue is not a valid accounting term.

When a Business Receives Cash from a Customer Before Earning