Revenue Received Before It Is Recognized and Expenses Used or Consumed

question 122

True/False

Revenue received before it is recognized and expenses used or consumed before being paid are both initially recorded as liabilities.

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Definitions:

EFT Deposit

An electronic funds transfer deposit, which represents the digital transfer of money into a bank account.

Petty Cash Fund

is a small amount of cash kept on hand by a business for making immediate and minor payments, reducing the need for check transactions.

Journalize

The process of recording business transactions in a journal, the first step in the accounting cycle.

Replenishment

The process of refilling inventory levels to ensure sufficient stock is available for future sales or production demands.