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:

Annual Net Cash Flows

The total amount of money that flows in and out of a business in one year, after all expenses have been paid.

Capital Investment Analysis

The process of evaluating investment opportunities and their potential returns, often to decide on the allocation of capital resources.

Present Value of Annuity

The current worth of a stream of equal payments made at regular intervals, discounted at a specific interest rate.

Capital Investment Evaluation Methods

Techniques used to assess the value and potential return of investments a business makes in long-term assets, including net present value, return on investment, and payback period analysis.