Which of the Following Correctly Describes the Effects of Initially

Multiple Choice

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

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