Which of the Following Is Not True About Deferred Revenue

question 20

Multiple Choice

Which of the following is not true about deferred revenue?

• A) Deferred revenue with respect to gift cards is recognized as revenue when the gift cards expire.
• B) Deferred revenue is a liability.
• C) Deferred revenue is recognized on credit sales when collectibility can be estimated.
• D) Customer prepayments typically require recognition of deferred revenue.

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Definitions:

Regression Line

A straight line that best fits the data points on a scatter plot, showing the relationship between the independent and dependent variables.

Annual Rainfall

The total amount of precipitation, measured in units of length, that falls in a specific area over the course of one year.

Shoreline Erosion

The process by which coastal land is worn away by natural forces such as wave action, currents, or tidal movements.

Least Squares Regression

A statistical method used to fit a regression line through a set of points in such a way that minimizes the sum of the squares of the vertical distances of the points from the line.