Refer to Jones Corporation.Upon collection of the upfront fee,Jones would recognize a/an ________.
A)unearned revenue of $250,000
B)unearned revenue of $350,000
C)prepaid revenue of $250,000
D)prepaid revenue of $350,000

Question

Quizplus · Accepted Answer

When a company collects an upfront fee, it is recognized as unearned revenue as the company has not yet earned it by providing goods or services. In this case, Jones Corporation collected an upfront fee of $250,000, which would be recognized as unearned revenue. The other options are incorrect as they do not reflect the concept of unearned revenue.