Which of the Following Correctly Describes the Effects of Initially

Multiple Choice

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

A) Revenues are increased.
B) Liabilities are not affected.
C) Retained earnings increases.
D) Net income is not affecteD.Deferred revenues 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.