When the Balance of the Unearned Revenue Account Decreases During

question 165

Multiple Choice

When the balance of the Unearned Revenue account decreases during an accounting period:

• A)Accrual-basis revenues exceed cash collections from customers.
• B)Accrual-basis expenses exceed cash collections from customers.
• C)Accrual-basis revenues are less than cash collections from customers.
• D)Accrual-basis net income is less than cash-basis net income.

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Definitions:

Taxes Payable

The amount of tax a company or individual owes to the tax authorities but has not yet paid by the end of the accounting period.

Taxes Expense

The total amount of taxes owed by an individual or corporation to the government within a fiscal period.

Adjusted Entry

An accounting record made to amend the effects of previously recorded transactions to accurately reflect financial realities.

Taxes Expense

The total amount of taxes owed by a business to federal, state, and/or local governments as determined by applicable tax rates on business income.