Expenses Paid and Recorded in an Asset Account Before They

question 244

Short Answer

Expenses paid and recorded in an asset account before they are used or consumed are called ______________. Revenue received and recorded as a liability before it is recognized is referred to as ______________.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, indicating how much revenue is contributing to fixed costs and profit.

Automated Factory

A production facility that relies heavily on automated processes and machinery to manufacture goods with minimal human intervention.

Fixed Expenses

Costs that do not vary with the level of production or sales, such as rent, insurance, and salaries.

Variable Expenses

Expenses that change in proportion to the activity of a business, such as sales commissions that rise with increased sales or materials costs that rise with increased production.