Which of the Following Entries Is an Example of Asset

question 5

Multiple Choice

Which of the following entries is an example of asset consumption recognised over future time periods?

• A) DR Warranty expense CR Warranty liability
• B) DR Cost of goods sold CR Inventory
• C) DR Customer deposits CR Service revenue
• D) DR Salaries expense CR Cash

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Definitions:

Exclusive Agency Contract

A contractual agreement where one party grants another party the exclusive rights to act on their behalf, typically used in real estate and talent management.

Implied Authority

This refers to the power of an agent to perform acts which are reasonably necessary to accomplish the purpose of an organization’s agency agreement, even if not explicitly granted.

Duty of Accounting

The obligation of a party (usually a fiduciary) to keep accurate records and report financial activity to relevant stakeholders or authorities.

Agent Owe

The duty or obligation an agent has to act in the best interest of the principal, including loyalty, care, and full disclosure.