Answered step by step
Verified Expert Solution
Question
1 Approved Answer
If Nickel Co. experiences a large increase in its unearned revenue in 2018, all else being equal, what would you expect the effect on revenue
If Nickel Co. experiences a large increase in its unearned revenue in 2018, all else being equal, what would you expect the effect on revenue would be for Nickel Co. in future periods?Multiple ChoiceLarge decrease, because unearned revenue indicates collection problems that will reduce net revenues in future periods.Large increase, because unearned revenue becomes revenue when revenue is earned.No effect, because unearned revenue is a liability, so payment will use assets rather than providing revenue.Large decrease, because unearned revenue implies that less revenue has been earned, which reduces future revenue.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Great question To understand the impact of a large increase in unearned revenue on future periods re...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started