In which of the following situations would Daystar Company record unearned revenue in May?
A)In April,Daystar Company received payment from a customer for services that are performed in May.
B)Daystar Company completes a job for a customer in May;payment will be received in June.
C)Daystar Company is paid on May 25 for work done in the first two weeks of May.
D)Daystar Company receives payment in May for work to be performed in June and July.

Question

Quizplus · Accepted Answer

Unearned revenue is recorded when payment is received before the services are performed. In option D, Daystar Company receives payment in May for work to be performed in June and July, which fits this definition.

In Which of the Following Situations Would Daystar Company Record