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 answers is correct.

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 the services are performed or goods are delivered. It does not increase income or assets until the services are provided or goods are delivered.

Fees Accepted in Advance from a Client