Deferred revenue represents:

A Revenue already earned

B Cash received before the related goods or services have been delivered

C Bad debt expense

D Prepaid expenses

✓ Correct Answer: Option B

Deferred (unearned) revenue: liability account. Cash received in advance for goods/services not yet delivered. Recognized as revenue when the performance obligation is satisfied.

💡 Why is B) the correct answer?

The correct answer to the question "Deferred revenue represents:" is Option B: Cash received before the related goods or services have been delivered.

The other options — A) Revenue already earned, C) Bad debt expense, D) Prepaid expenses — are incorrect for this Pre-MBA Exam Prep question. As explained above: Deferred (unearned) revenue: liability account. Cash received in advance for goods/services not yet delivered. Recognized as revenue when the performance obligation is satisfied.

📚 About This Pre-MBA Exam Prep Practice Question

This 2-level Pre-MBA Exam Prep question from the Accounting topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free Pre-MBA Exam Prep practice test or use flashcards for spaced repetition review.

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Deferred revenue represents:

✓ Correct Answer: Option B

📚 About This Pre-MBA Exam Prep Practice Question

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