If an Unearned Revenue Is Initially Recorded as a Liability

question 60

True/False

If an unearned revenue is initially recorded as a liability, the end-of-period adjusting entry records the unearned portion.

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Definitions:

Average Accounts Receivables

The average amount of money owed to a company by its customers for goods or services provided on credit over a specific period.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue owed by its customers over a period.

Management Assessment

An evaluation process where management reviews financial and operational performance, often for strategic decision-making.

Interest

The cost of borrowing money, expressed as a percentage of the amount borrowed, paid by the borrower to the lender.