In 2011, a software company recorded unearned revenue related to a software license that it will recognize as revenue during 2012. Ignoring income taxes, this recognition of the software revenue will most likely have which of the following effects on cash from operations in 2012?
A is correct. The company received the cash in 2011 when it recorded the unearned revenue and it was a part of the cash from operations in that year. In 2012, the revenue is earned but there is no cash exchanged and hence no effect of the cash from operations, ignoring taxes.