The Liability Created When a Business Collects Cash from Its

question 82

Multiple Choice

The liability created when a business collects cash from its customers before completing a service or delivering a product is called ________.

• A) accrued revenue
• B) accrued expense
• C) deferred revenue
• D) deferred expense

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Definitions:

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but retained by the company for reinvestment.

Dividends Declared

The announcement by a company's board of directors of the intention to pay a dividend to shareholders, indicating the amount and payment date.

Financial Position

A snapshot of a company's assets, liabilities, and equity at a specific point in time, illustrating its economic standing.

Statement of Income

A financial document outlining a company's revenues, expenses, and net income over a specific period.