Unearned Revenue Is Revenue That

question 152

Multiple Choice

Unearned revenue is revenue that:

• A)will be collected and earned in the future.
• B)the business has collected in cash, but not yet earned.
• C)has been collected and earned.
• D)the business has earned, but not collected in cash.

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Definitions:

Cost-Plus Methods

Methods of price setting determined by the cost amount per unit plus a markup based on the desired profit per unit.

Selling Price

The amount of money for which a product or service is sold to customers.

Markup

The amount added to the cost price of goods to cover overhead and profit, determining the selling price.

Total Cost Method

A cost-plus method of price setting in which all the costs of manufacturing the product plus the selling and administrative expenses are included in the cost amount to which the markup is added.