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 assets 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 company receives payment for goods or services that it has not yet delivered. It represents an obligation of the company to provide the product or service at a later date. Once the product or service is provided, the unearned revenue is recognized as revenue on the income statement.

Unearned Revenues Refer to A(n)