On Both Old and New Business, Companies Can Also Avoid

On both old and new business, companies can also avoid premium notes by entering into agreements involving deposits of a portion of the premium with an extension on the balance. These deposits are treated as:

A) A liability
B) Unearned revenue and not credited to income until the deposit is used to pay the premium
C) A liability and not credited to income until the deposit is used to pay the premium
D) Asset and not credited to income until the deposit is used to pay the premium

Correct Answer:

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