A Deposit Received in Advance by Adelaide Co for Services

question 51

Multiple Choice

A deposit received in advance by Adelaide Co for services not yet supplied can be initially recorded by Adelaide in a liability account called:

• A) sales.
• B) accounts payable.
• C) unearned income.
• D) expenses payable.

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Definitions:

Markup

The difference between the cost of a product or service and its selling price, expressed as a percentage of the cost, used to cover expenses and generate profit.

FOB Shipping Point Pricing

A term in shipping where the buyer is responsible for the goods once they leave the seller’s premises, including paying for shipping and handling.

Corporate Customers

Businesses or organizations that purchase a company's products or services, often in bulk or on a contractual basis.

Luxury Food

High-quality, often expensive food items that are considered rare or indulgent, typically consumed as a sign of wealth or for special occasions.