Unearned Revenue Is Reported in the Financial Statements As

question 189

Multiple Choice

Unearned revenue is reported in the financial statements as:

• A) A revenue on the balance sheet.
• B) A liability on the balance sheet.
• C) An unearned revenue on the income statement.
• D) An asset on the balance sheet.
• E) An operating activity on the statement of cash flows.

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Definitions:

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board (IASB) that guide the preparation of financial statements globally.

Inventories

Items held for sale in the ordinary course of business, as well as materials and components intended for use in the production process.

GAAP

A universally recognized set of rules and standards for financial reporting, applied within a specific legal territory, known as Generally Accepted Accounting Principles.

Income Statement

A financial report that provides a summary of a company's revenues, expenses, and profits/losses over a specific period of time.