A Liability Created by the Receipt of Cash from Customers

Multiple Choice

A liability created by the receipt of cash from customers in payment for products or services that have not yet been delivered to the customers is:

A) Recorded as a debit to an unearned revenue account.
B) Recorded as a debit to a prepaid expense account.
C) Recorded as a credit to an unearned revenue account.
D) Recorded as a credit to a prepaid expense account.
E) Not recorded in the accounting records until the earnings process is complete.