Which statement about deferred revenue is correct?
A)Deferred revenue is always a non-current liability.
B)Deferred revenue could arise from loyalty programs.
C)Deferred revenue is measured using expected values.
D)Deferred revenue arises when the goods are shipped.

Question

Quizplus · Accepted Answer

Deferred revenue can arise from loyalty programs where the customer pays for future goods or services in advance. Option A is incorrect because deferred revenue can also be current in nature. Option C is not entirely accurate because deferred revenue is measured using either the cost or the selling price, whichever is more readily available and reliable. Option D is incorrect because deferred revenue arises when the payment is received, not when the goods are shipped.

Which Statement About Deferred Revenue Is Correct