Question

True or False: Making high estimates of unearned revenue that has been completed would inflate the companys revenues Select
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Answer #1

ANSWER: False

EXPLANATION:

Unearned revenue is a liability account therefore it would not inflate/increase company’s revenue. Company’s revenue is inflated by revenue items only and not by a liability account

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Answer #2

True

Any completed unearned revenue increases revenue, so overestimating completion would inflate the company's revenue.

source: AML
answered by: matin
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