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Determining the company current liabilities

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As a common practice, Rova Inc. mostly collects upfront payments for goods that will be delivered to customers in the future. Unearned revenues contribute significantly to the company's current liabilities.

Commentator A: The advance cash received from customers can be used to finance the company's operations, and the corresponding liabilities that are recorded will appear as sales in future financial statements. Therefore, this practice is beneficial to Rova Inc. and should be continued.

?Which of the following statements weakens commentator A's argument??

Reference no: EM132346854

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