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:

Surrogate Mother

A woman who agrees to bear a child on behalf of another person or couple, often through artificial insemination or gestational surrogacy.

Ovaries Removed

A surgical procedure, known as oophorectomy, involving the removal of one or both ovaries, often performed to treat or prevent certain medical conditions.

Chromosomal Abnormalities

Variations in the number or structure of chromosomes, which can lead to developmental, physical, or intellectual disabilities.

Miscarriage

The spontaneous loss of a pregnancy before the fetus can survive outside the womb, usually before 20 weeks of gestation.