Unearned Revenues Refer to A(n)

question 100

Multiple Choice

Unearned revenues refer to a(n) :

• A) Expense incurred because a customer has paid in advance.
• B) Increase in revenues as a result of delivering products or services to a customer.
• C) Liability that is settled in the future when a company delivers its products or services.
• D) Decrease in an asset.
• E) Asset that will be used over time.

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Definitions:

GAAP Standards

Generally Accepted Accounting Principles (GAAP) are a collection of commonly followed accounting rules and standards for financial reporting.

Planning and Control Tool

Instruments or techniques used in the management process to set objectives, assess future trends, and oversee progression towards desired outcomes.

Acid-Test Ratio

A financial metric used to determine a company's short-term liquidity situation by comparing its most liquid assets, excluding inventory, to its current liabilities.

Current Assets

Short-term assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, including cash, inventory, and receivables.