Deferred Revenue Is a Liability Created When a Business Collects

question 107

True/False

Deferred Revenue is a liability created when a business collects cash from customers in advance of completing a service or delivering a product.

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Definitions:

Assets

Economic resources owned or controlled by a business, expected to provide future benefits.

Total Assets

The sum of all assets owned by a business, including both current and non-current assets.

New Building

This term refers to the accounting classification of a recently constructed building as a fixed asset, which will be subject to depreciation over its useful life.

Cash

A form of currency that can be used to exchange goods, services, or to settle debts.