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At Rusty Springs Ltd, a new online order system is being designed for its registered customers. Each customer has an account, allowing them to order from a pre-populated form containing details of their purchases in the previous three months. The customer simply ticks which previous purchases they would like to re-order, confirms delivery details and approves the purchase. A Rusty Springs administrator updates the purchase details on the system on a monthly basis and the sales manager gets an automated order from the system within two hours of the purchase. A business analyst has written a use case entitled 'Key Customer Purchases Springs', which includes the following lines: A) The customer has logged onto the system and wishes to purchase springs. B) The customer adds a new product code onto the system. C) Only the registered customer can make an order. D) The system returns the previous purchases. Which of the following is correct?
Prepaid Expense
An expense that has been paid in advance and is recorded as an asset until it is actually incurred.
Unearned Revenue
Unearned revenue refers to payment received for goods or services that have not yet been delivered or rendered. It is recorded as a liability on the balance sheet until the transaction is completed.
Accrued Expense
Expenses that have been incurred but not yet paid for, recognized in the accounting periods they are incurred rather than when cash changes hands.
Unearned Revenue
Income received by a company for goods or services that have not yet been delivered or performed; it is recorded as a liability on the balance sheet until the goods or services are provided.
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