Correct Answer:
D. A liability
The entity owes goods or services for the cash received in advance.
November 13, 2026 · Accounting and Finance MCQs, Financial Accounting MCQs
Unearned (deferred) revenue is reported as:
Related MCQs
The three Es of performance auditing are:
A.
Economy, efficiency and effectiveness
B.
Equity, ethics and elections
C.
Estimates, expenses and earnings
D.
Education, employment and environment
Correct answer is:
A. Economy, efficiency and effectiveness
Do you agree with this answer?
When shares are issued at a price above their par value, the excess is credited to:
A.
Retained earnings
B.
Share premium
C.
Revenue
D.
Loan account
Correct answer is:
B. Share premium
Do you agree with this answer?
An auditor who prepares the client's accounting records and then audits them faces which threat?
A.
Familiarity threat
B.
Intimidation threat
C.
Self-review threat
D.
No threat at all
Correct answer is:
C. Self-review threat
Do you agree with this answer?
Tax incidence refers to:
A.
The date on which the tax is due
B.
The rate of tax
C.
Who finally bears the burden of a tax
D.
The number of taxpayers
Correct answer is:
C. Who finally bears the burden of a tax
Do you agree with this answer?
The National Finance Commission (NFC) is constituted under:
A.
Article 90 of the Constitution
B.
Article 140 of the Constitution
C.
Article 175 of the Constitution
D.
Article 160 of the Constitution
Correct answer is:
D. Article 160 of the Constitution
Do you agree with this answer?
Under the direct write-off method, when a specific receivable is written off as bad:
A.
Accounts receivable is debited and sales is credited
B.
Cash is debited and receivables is credited
C.
Bad debt expense is debited and accounts receivable is credited
D.
Allowance for doubtful debts is debited and cash is credited
Correct answer is:
C. Bad debt expense is debited and accounts receivable is credited
Do you agree with this answer?
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