Under the Cash Basis of Accounting, an Amount Received from a Customer

question 93

Multiple Choice

Under the cash basis of accounting, an amount received from a customer in advance of providing the services would be reported as a(n) :

• A)revenue.
• B)liability.
• C)expense.
• D)prepaid expense.

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Definitions:

Canada

A country in North America known for its vast landscapes, multicultural diversity, and being the second-largest country by total area.

Broadly Held Corporation

A corporation that has a large number of shareholders, with no single shareholder having a controlling interest.

Share Interest

The percentage of ownership an individual or entity holds in a company, measured through the proportion of shares owned.

Indebtedness

The state of owing money or being under financial obligation to another party.