Question

Which of the following do not apply to unearned revenues?

a. May also be called deferred revenues.
b. Amounts received in advance from customers for future delivery of products or services.
c. Gift cards are an example. Result from prepayments for concert tickets.
d. Amounts to be received in the future from customers for delivery of products or services in the current period.

Answer 1

Answer: Option D

Step-by-step explanation: In simple words, unearned revenue refers to the liability account that depicts the cash that is received in the current for the supply of good or service that will be made in some future period.

For example- a door to door newspaper seller taking advance subscription fees for one year or any event organizing committee taking advance money for tickets of a concert that will happen in the future.

Such incomes can only be recognized when the intended service is completed for the customer.