A liability created when a business collects cash from customers in advance of providing services or delivering goods is called a(n)________.

Question

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Unearned revenues are liabilities created when a business collects cash from customers in advance of providing services or delivering goods. Option A, notes receivable, is an asset that represents a written promise by a customer or borrower to pay a specific sum of money on a specified future date. Option C, equity, represents the residual interest in the assets of an entity after deducting liabilities. Option D, revenues, represent the inflows of economic resources resulting from the sale of goods or services.

A Liability Created When a Business Collects Cash from Customers