A Liability Created by the Receipt of Cash from Customers

question 85

Multiple Choice

A liability created by the receipt of cash from customers in payment for products or services that have not yet been delivered to the customers is:

• A) Recorded as a debit to an unearned revenue account.
• B) Recorded as a debit to a prepaid expense account.
• C) Recorded as a credit to an unearned revenue account.
• D) Recorded as a credit to a prepaid expense account.
• E) Not recorded in the accounting records until the earnings process is complete.

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Definitions:

Electoral System

A set of rules that determine how votes are cast, counted, and translated into seats in a legislature or for another form of representative government.

List System

A method used in proportional representation electoral systems where parties present lists of candidates and the number of seats won by each party is proportional to the number of votes received.

Political Parties

Are organizations that compete for control of government. In the process, they give voice to policy alternatives and rally adult citizens to vote.

Pluralist

Pluralism is a concept that suggests a diverse, multicultural society where multiple groups maintain their distinctive cultural identities while coexisting with one another, often in a democratic framework.