Fees accepted in advance from a client
A)are recorded as earned revenues on the income statement.
B)increase income.
C)are recorded as liabilities.
D)do not increase assets.
E)none of these.

Question

Quizplus · Accepted Answer

Fees accepted in advance from a client are considered unearned revenue and are recorded as a liability on the balance sheet until earned. Therefore, they do not increase income as they have not been earned yet. Once they are earned, they will then be recorded as earned revenues on the income statement.

Fees Accepted in Advance from a Client