Which one of the following statements related to accounting for prepaids and acc

Question

Which one of the following statements related to accounting for prepaids and accruals is not accurate?

Both prepaid revenues and prepaid expenses are created when cash is exchanged in accounting periods prior to the revenues and expenses being realized. Unearned revenues and accrued revenues are conceptually identical. Unearned revenue and deferred income are two terms that represent the same set of circumstances. Deferred revenue is created when cash is received prior to a company earning the related revenue.

Explanation / Answer

Unearned revenues and accrued revenues are conceptually identical.

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