Answer (A) is correct.
The entity has not substantially completed what it must do to be entitled
to the benefits of the advance payment, and the receipt of future
economic benefits is not sufficiently certain to justify income
recognition. Accordingly, the receipt of cash in anticipation of goods to
be delivered or services to be performed must be recognized as a
liability, usually called deferred (or unearned) revenue or deferred (or
unearned) income. Because the manufacturer must deliver the goods
within the next year, this liability is current.