Unearned revenues are:
A) Revenues that have been earned and received.
B) Revenues that have been earned but not yet collected.
C) Liabilities created by advance cash payments from customers for products or services.
D) Recorded as an asset in the accounting records.
E) Increases to owners' equity.

Question

Quizplus · Accepted Answer

Unearned revenues are advance payments made by customers for products or services that have not yet been provided. This creates a liability for the company as they owe the customers the product or service they paid for. Therefore, option C is the correct answer. Options A, B, D, and E are incorrect as they all refer to earned revenues and not unearned revenues.

Unearned Revenues Are