When Money Is Received from a Customer Prior to the Delivery

question 117

True/False

When money is received from a customer prior to the delivery of goods or the performance of a service, it is recorded as revenue.

---

Definitions:

Inventory Account

An account in the financial statements that represents the value of goods a company has in stock, either finished goods, work in progress, or raw materials.

Operating Activities

Transactions and events that relate to the main activities of a company, typically including cash inflows and outflows from sales and expenses.

Net Cash Provided

The net amount of cash generated by an organization's operating, investing, and financing activities within a specific period.

Cash Account

An account reflecting the amount of cash a company holds, including physical currency and money in bank accounts.