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Scenario
Please read the following scenario to answer the following questions.
The last few miles of the marathon are the most difficult for Heather. Her hair is plastered to her head, sweat clings to her arms, and her legs feel as if they had nothing left. Heather grabs a cup of ice water. The ice cubes smash against her nose as she gulps some cool refreshment and keeps on running. Then a breeze kicks up and she finally feels some coolness against her skin. Drops of sweat, once clinging to her forehead, now spill down, and Heather feels a stinging as the sweat flows into her eyes.
-When Heather grabbed the glass of ice water, the ice cubes were floating at the top. Why were the ice cubes floating in the water?
Accrual
Accrual is an accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.
Liability
A liability is a company's financial debt or obligation that arises during the course of business operations, listed on the right-hand side of the balance sheet.
Asset
Resources with economic value owned by an individual, corporation, or country, expected to provide future benefits.
Tax Deductible
Expenses that can be subtracted from gross income to reduce the amount of income subject to income tax.
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