All Else Equal, a Large Increase in Deferred Revenue in the Current

Multiple Choice

All else equal, a large increase in deferred revenue in the current period would be expected to produce what effect on revenue in a future period?

A) Large increase, because deferred revenue becomes revenue when the seller has satisfied its performance obligations.
B) Large decrease, because deferred revenue implies that less revenue has been earned, which reduces future revenue.
C) No effect, because deferred revenue is a liability, so payment will use assets rather than providing revenue.
D) Large decrease, because deferred revenue indicates collection problems that will reduce net revenues in future periods.