A Liability Created by the Receipt of Cash from Customers

question 68

Multiple Choice

A liability created by the receipt of cash from customers in payment for products or services that have not yet been delivered to the customers is:

• A)Recorded as a credit to a prepaid expense account.
• B)Recorded as a credit to an unearned revenue account.
• C)Recorded as a debit to a prepaid expense account.
• D)Recorded as a debit to an unearned revenue account.
• E)Not recorded in the accounting records.

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Definitions:

Pectoral Girdle

The skeletal framework that provides attachment for the upper limbs to the axial skeleton, consisting of the scapulae and clavicles.

Upper Abdominal Organs

Organs located in the upper portion of the abdomen, including the stomach, liver, gallbladder, spleen, and pancreas.

Lateral Projections

Outward extensions or parts of a structure, often used to describe anatomical features that extend to the sides of the body or body parts.

Transverse Processes

Lateral projections from the vertebrae, where muscles and ligaments attach.