Which type of general ledger account should be used for Deferred Revenue Membership tasks?

The correct choice is to classify Deferred Revenue as a liability account. When a business receives payment for a membership in advance of providing its services, it recognizes that there is an obligation to deliver those services in the future. This situation means that the business has a liability until it fulfills its commitment to the customer.

Deferred revenue essentially represents money received for services not yet rendered. Since this payment creates a future obligation, it does not count as earned revenue until the services are provided. Thus, it is recorded on the balance sheet as a liability. The recognition of revenue happens later, once the services associated with the memberships have been delivered.

In contrast, an asset account would imply ownership of resources that will provide future economic benefits, which does not apply here. A revenue account is used to record income earned from services provided, which would not be the case until the membership services are delivered. Finally, an expense account represents costs incurred, which is not relevant in the context of deferred revenue. Therefore, recognizing Deferred Revenue as a liability account accurately reflects the nature of the transaction.