Suppose that a customer pays a deposit for work to be done next year. The business will increase an asset account (cash at bank) and will:
A) Increase owner's equity (revenue).
B) Decrease an asset (accounts receivable).
C) Increase a liability (unearned revenue).
D) Increase an asset (revenue).

Question

Quizplus · Accepted Answer

cash received in advance is a liability, unearned revenue, as this is an obligation of a business to provide goods or services in the future

Suppose That a Customer Pays a Deposit for Work to Be