Question

unearned revenue, an operating liability, arises when a company receives cash before any goods are delivered or services are rendered. select one: true false

Answer 1

It is accurate to say that when a business receives money before providing any goods or services, unearned income, an operating liability, results. Therefore, the statement is true.

What is operating liability?

Operating liabilities are the costs that businesses incur to maintain their operations, such as income taxes and accounts payable.

Accounts payable amounts owed to creditors who have expensed the company, accrued expenses, and amounts owed to suppliers for whom the company has not yet received an invoice and must estimate the liability are examples of operating liabilities that are related to the day-to-day operations of the business.

Learn more about liabilities, from:

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