Transactions where cash is received before being earned often result in adjusting entries at the end of the period to record profit in the proper period.

Question

Quizplus · Accepted Answer

This statement is true. Transactions where cash is received before being earned are called "unearned revenues" or "deferred revenues." Adjusting entries need to be made at the end of the period to ensure that revenue is recognized in the proper period when it is earned, rather than when the cash was received. This is done to accurately reflect the financial performance of the business in the given period.

Transactions Where Cash Is Received Before Being Earned Often Result