Subtracting a Decrease in Unearned Revenue from Net Income Eliminates

question 193

Multiple Choice

Subtracting a decrease in Unearned Revenue from net income eliminates the effect of recording revenue that:

• A) increased net income, but did not impact cash this period.
• B) decreased net income, but did not impact cash this period.
• C) increased net income and increased cash flow this period.
• D) decreased net income and decreased cash flow this perioD.
• Subtracting decreases in current liabilities eliminates the effects of transactions that increased net income but did not affect cash. For example, a company decreases Unearned Revenue and increases net income in the current period when it fulfills its prior obligations to provide services, but cash is not affecteD.

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Definitions:

Kilograms

A unit of mass in the metric system equal to one thousand grams or approximately 2.20462 pounds.

Puncture-Proof Container

A secure, leak-proof container designed to safely store sharp items like needles to prevent injury or contamination.

Contaminated Needle

A needle that has been exposed to disease-causing agents, posing a risk of infection upon use.

Eardrops

Liquid medicine applied into the ear canal to treat infections, relieve pain, or clear earwax.