A Liability Created When a Business Collects Cash from Customers

question 32

Multiple Choice

A liability created when a business collects cash from customers in advance of providing services or delivering goods is called:

• A)notes receivable.
• B)unearned revenues.
• C)capital.
• D)revenues.

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Definitions:

Abductive Reasoning

A type of logical inference which begins with an observation then seeks to find the simplest and most likely explanation.

Retroductive Reasoning

A form of reasoning that starts from an observed effect and works backward to hypothesize a cause; also known as abductive reasoning.

Deeper Meaning

The underlying or significant significance of a concept, action, or statement beyond its surface level interpretation.

Groupthink

A phenomenon occurring within a group of people in which the desire for harmony results in an irrational decision-making outcome.