Receiving Cash in Advance of Performing a Service Creates a Liability

question 107

True/False

Receiving cash in advance of performing a service creates a liability for the company.

---

Definitions:

Sales Dollars

The overall income earned from the sales of products or services, measured in currency.

Break-even

The point at which total costs and total revenue are equal, resulting in no profit or loss for the business.

Variable Cost

Outgoings that are directly influenced by how much is produced or sold, including the costs of labor and materials.

Monthly Dollar Sales

The total revenue generated from sales in a given month, expressed in U.S. dollars.