Question

(4) When revenue income received in cash,
(a) increase in assets - increase in liability
(b) increase in assets - decrease in liability
() increase in assets - increase in capital
(d) increase in capital - decrease in liability​

Answer 1

Answer:

If they will be earned within one year, they should be listed as a current liability. When a company receives money in advance of earning it, the accounting entry is a debit to the asset Cash for the amount received and a credit to the liability account such as Customer Advances or Unearned Revenues.