Which of the Following Is an Accurate Definition of the Term

question 64

Multiple Choice

Which of the following is an accurate definition of the term asset?

• A)An obligation to creditors.
• B)A resource that will be used to produce revenue.
• C)A transfer of wealth from the business to its owners.
• D)A sacrifice incurred from operating the business.

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Definitions:

Accrual-Basis Accounting

An accounting method where revenue is recorded when earned and expenses are recorded when incurred, regardless of cash flow.

Unearned Revenue

Income received by a business for goods or services yet to be provided, often recorded as a liability on the balance sheet until the revenue is earned.

Accrued Revenue

Income that a company has earned but has not yet received payment for.

Depreciation

The methodical distribution of a physical asset's cost across its lifespan, mirroring its depreciation over time.