Which of the following correctly describes the effects of recording deferred revenues when cash is received...

Which of the following correctly describes the effects of recording deferred revenues when cash is received from a customer in advance of the services to be provided?
A. Revenues are increased
B. Liabilities are not affected
C. Retained earnings increases
D. Net income is not affected

Solutions

Expert Solution

Solution :- Net Income is not affected

Transaction	General Journal	Debit ($)	Credit ($)	Impact
a	Bank Account	XXX		Increase in Asset
	To Customer Account		XXX
	(Being amount received from customer)

b	Customer Account	XXX
	To Deferred Revenue Account		XXX	Increase in Liabilities
	(Being amount transferred to Deferred Revenue

ekkarill92 answered 1 year ago

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