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One of the criteria for recognizing revenue is that it must be earned. In other words, a company must fulfill all obligations to the customers.

  1. One of the criteria for recognizing revenue is that it must be earned. In other words, a company must fulfill all obligations to the customers. If MicroStrategy received cash from the two contracts, but had not yet earned any revenue under the agreements, what accounts would change? If MicroStrategy had not received any cash from customers and revenue was unearned, what account would change?

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