If Unearned Revenues Are Initially Recorded in Revenue Accounts and Have

question 94

Multiple Choice

If unearned revenues are initially recorded in revenue accounts and have not all been earned at the end of the accounting period, then failure to make an adjusting entry will cause

• A) liabilities to be overstated.
• B) revenues to be understated.
• C) revenues to be overstated.
• D) accounts receivable to be overstated.

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Definitions:

Risk Avoidance Plan

A strategy or approach to identify, assess, and prevent potential risks from impacting a project or business activity.

Financial Risk

The possibility of losing money or the financial uncertainty involved in an investment, business venture, or other financial activities.

Project Risk

Potential problems that could endanger the success of a project, including uncertainties and potential negative events.

Organizational Risk

Refers to the potential for losses or other adverse outcomes that an organization may face due to various internal and external factors.