Customers' Accounts with Credit Balances Should Be Disclosed as A(n)

question 145

Multiple Choice

Customers' accounts with credit balances should be disclosed as a(n)

• A) expense on the income statement.
• B) current liability on the balance sheet.
• C) offset to Accounts Receivable on the asset side of the balance sheet.
• D) note to the financial statements.

---

Definitions:

Capital Improvement

An addition or change to a property that increases its value or usefulness, often extending its usability duration and treated differently than regular maintenance for tax purposes.

Rental Activity

Involves renting out property or equipment as a source of income, with tax implications based on the duration of rental and type of property.

Depreciation Deduction

A tax deduction that allows a taxpayer to recover the cost of property or assets that have a useful life beyond the tax year, by spreading the cost over the life of the property.

Depreciation Tables

Charts provided by the IRS to assist taxpayers in calculating the depreciation expense of an asset for tax purposes over its useful life.