Unearned revenues are:
A) Revenues that have been earned and received in cash.
B) Revenues that have been earned but not yet collected in cash.
C) Liabilities created when a customer pays in advance for products or services before the revenue is earned.
D) Recorded as an asset in the accounting records.
E) Increases to owners' capital.

Question

Quizplus · Accepted Answer

Unearned revenues are liabilities created when a customer pays in advance for products or services before the revenue is earned. This is because the company has an obligation to provide the product or service in the future, and until it does so, the amount received is considered a liability.

Unearned Revenues Are