When a Down Payment Is Received, the Deposit from Purchaser

question 44

Multiple Choice

When a down payment is received, the deposit from purchaser account used under the deposit method is reported on the balance sheet of the seller as a(n)

• A)revenue
• B)liability
• C)asset
• D)contra asset

---

Definitions:

Bakery Outlets

Retail stores that sell bakery products directly from manufacturers, often at discounted prices due to surplus or approaching expiration dates.

Fresh Baked Goods

Food items like bread, pastries, and cakes that are recently made and have not been preserved by any artificial means.

Cost of Equity Capital

The rate of return that a company must offer investors to incentivize them to hold its equity, reflecting the risk of the investment.

Toronto Stock Exchange

The largest stock exchange in Canada, where Canadian stocks and securities are traded.