Unearned Revenue Is Recorded When ________

question 77

Multiple Choice

Unearned revenue is recorded when ________.

• A) revenue will be both collected and earned in the future
• B) the business has collected cash, but not yet earned the revenue
• C) revenue has been collected and earned during the same accounting period
• D) the business has earned, but not collected, cash for the revenue

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Definitions:

Time Value Of Money

A financial principle stating the value of money is time-dependent, where a dollar today is worth more than a dollar in the future due to its potential earning capacity.

Discount Rate

The rate of interest that is employed in discounted cash flow calculations to assess the present-day worth of cash flows that are expected to occur in the future.

Overhaul Costs

Expenses incurred for significant repairs or major restoration of equipment, machinery, or buildings which extend their life but do not qualify as capital expenses.

Incremental Cost Approach

An analysis technique that focuses on the additional costs and benefits associated with a particular decision or project.