All Else Equal, a Large Increase in Deferred Revenue in the Current

question 62

Multiple Choice

All else equal, a large increase in deferred revenue in the current period would be expected to produce what effect on revenue in a future period?

• A) Large increase, because deferred revenue becomes revenue when the seller has satisfied its performance obligations.
• B) Large decrease, because deferred revenue implies that less revenue has been earned, which reduces future revenue.
• C) No effect, because deferred revenue is a liability, so payment will use assets rather than providing revenue.
• D) Large decrease, because deferred revenue indicates collection problems that will reduce net revenues in future periods.

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Definitions:

Evolutionary Course

The sequence of changes or developments in organisms or social entities over periods of time, driven by evolutionary mechanisms like natural selection.

Paleoanthropologists

Scientists who study human evolution by examining fossils and other evidence from the distant past.

Human Culture

The complex whole of beliefs, practices, artifacts, and institutions that humans develop, share, and transmit across generations.

Million Years Ago

A term used in geology and paleontology to specify a point in time millions of years before the present.