Which of the Following Correctly Describes the Effects of Initially

question 109

Multiple Choice

Which of the following correctly describes the effects of initially recording deferred revenue when cash is received from a customer?

• A)Revenue is increased.
• B)Liabilities are not affected.
• C)Retained earnings increases.
• D)Net income is not affecteD.Deferred revenue recorded when cash is received from a customer increases the unearned revenue account and increases cash.These are balance sheet accounts that do not impact net income.