Unearned revenues refer to a(n):
A)Asset that will be used over time.
B)Expense incurred because a customer has paid in advance.
C)Liability that is settled in the future when a company delivers its products or services.
D)Increase in revenues as a result of delivering products or services to a customer.
E)Decrease in an asset.

Question

Quizplus · Accepted Answer

Unearned revenues are liabilities that arise when a customer pays in advance for products or services that a company will deliver in the future. The company has an obligation to deliver the products or services, which will result in the unearned revenue being recognized as revenue when the obligation is fulfilled.

Unearned Revenues Refer to A(n)