Unearned Service Revenue: Definitions & Real-World Examples

Chapter 3, Problem 35

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QUESTION:

Unearned service revenue occurs when which of the following occurs?

A. company receives cash from a customer before performing the service

B. company pays cash before receiving a service from a supplier

C. company pays cash after receiving a service from a supplier

D. company receives cash from a customer after performing a service

Questions & Answers

QUESTION:

Unearned service revenue occurs when which of the following occurs?

A. company receives cash from a customer before performing the service

B. company pays cash before receiving a service from a supplier

C. company pays cash after receiving a service from a supplier

D. company receives cash from a customer after performing a service

ANSWER:

Step 1 of 2

Revenue: Revenue is the amount earned as income from the business activities and its operations. The revenue account represents the net income and impacts the owner’s equity by increasing the company's earnings. It has the normal balance of debit as per the account classification.

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