A contract liability is often referred to as
A) a contra-contract asset.
B) a performance obligation.
C) unearned revenue.
D) Both b. and c).are correct.

Question

Quizplus · Accepted Answer

A contract liability is recognized when a company has received payment (or an asset) from a customer before the company has performed the services or delivered the goods. This is often referred to as a performance obligation (the company's obligation to transfer goods or services to a customer for which the company has been paid) and unearned revenue (income received by a company for goods or services yet to be delivered or provided).

A Contract Liability Is Often Referred to as