Trades Are Considered Zero-Sum Transactions Since When One Person Gains

question 94

True/False

Trades are considered zero-sum transactions since when one person gains, the other loses an equal amount.

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Definitions:

Unearned Service Revenue

Income received in advance for services that have not yet been performed, considered a liability until the service is delivered.

Adjusting Entries

Adjustments in accounting records at the end of a period to correctly distribute incomes and costs to the period they pertain to.

Prepaid Rent

Payments made in advance for rent, recorded as an asset on the balance sheet until it is consumed over time and moved to expense.

Prepaid Expenses

Payments made in advance for goods or services, which are recorded as an asset until they are consumed or used.