At Times,businesses Require Advance Payments from Customers That Will Be

question 28

Multiple Choice

At times,businesses require advance payments from customers that will be applied to the purchase price when goods are delivered or services provided.These customer advances represent:

• A)Liabilities until the product or service is provided.
• B)A component of stockholders' equity.
• C)Long-term assets until the product or service is provided.
• D)Revenue upon receipt of the advance payment.

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Definitions:

Payroll Taxes

Levies charged to both employers and workers, determined as a proportion of the wages that businesses distribute to their personnel.

Federal Government

The national government of a federated state, which holds the authority to govern at a national level as distinct from regional or local levels.

Average Tax Rate

The fraction of total income that is paid as taxes, calculated by dividing the total amount of taxes paid by the taxpayer's total income.

Marginal Tax Rate

The rate at which the last dollar of a person's income is taxed, indicating how much tax will be paid on an additional dollar of income.