At Times, Businesses Require Advance Payments from Customers That Will

question 48

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 shareholders' 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:

Calories

Units of energy that measure the amount of energy food provides to the body.

Fat

A macronutrient that is a major source of energy for the body and aids in the absorption of vitamins.

Immediate Fuel

Energy sources that are quickly available to the body for immediate use, such as glucose.

Carbohydrates

Organic compounds consisting of carbon, hydrogen, and oxygen, typically found in foods and living tissues, vital for energy supply in living organisms.