Unearned Revenues Are Generally

question 228

Multiple Choice

Unearned revenues are generally:

• A) Increases to owners' capital.
• B) Recorded as an asset in the accounting records.
• C) Liabilities created when a customer pays in advance for products or services before the revenue is earned.
• D) Revenues that have been earned but not yet collected in cash.
• E) Revenues that have been earned and received in cash.

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Definitions:

Salvage Value

The projected value at which an asset can be sold upon reaching the end of its operational lifespan.

Tax Liability

The total amount of tax owed by an individual, corporation, or other entity to a taxing authority, such as the IRS.

Salvage Value

The anticipated market price of an asset upon the conclusion of its effective service life.

Marginal Tax Rate

The tax rate applied to the last dollar of income, which can be used to measure the impact of additional income or deductions on overall taxes due.