Deferred Revenue True or false: A reduction of the deferred revenue account can be interpreted as a leading indicator of lower future revenues. Explain Fale. Revenue is recognized when the deferred revenue liability increases. If the deferred revenue account has decreased, more cash came in from customers and more revenue will be recgnized in the future. True. Revenue is recognized when the deferred revenue liability decreases. If the deferred revenue account has decreased, less cash came in from customers and less revenue will be recognized in the future. False. Revenue is recognized when the deferred revenue liability decreases. If the deferred revenue account has decreased, less cash came in from customers and more revenue will be recognized in the future. True. Revenue is recognized when the deferred revenue liability decreases. If the deferred revenue account has decreased, more cash came in from customers and less revenue will be recognized in the future.

Exercise 12-7 shown below are comparative balance sheets for flint corporation. flint corporation comparative balance sheets december 31 assets 2017 2016 cash $ 201,348 $ 65,142 accounts receivable 260,568 225,036 inventory 494,487 559,629 land 236,880 296,100 equipment 769,860 592,200 accumulated depreciation—equipment (195,426 ) (94,752 ) total $1,767,717 $1,643,355 liabilities and stockholders’ equity accounts payable $ 115,479 $ 127,323 bonds payable 444,150 592,200 common stock ($1 par) 639,576 515,214 retained earnings 568,512 408,618 total $1,767,717 $1,643,355 additional information: 1. net income for 2017 was $275,373. 2. depreciation expense was $100,674. 3. cash dividends of $115,479 were declared and paid. 4. bonds payable amounting to $148,050 were redeemed for cash $148,050. 5. common stock was issued for $124,362 cash. 6. no equipment was sold during 2017. 7. land was sold for its book value. prepare a statement of cash flows for 2017 using the indirect method.