When a Company Sells Services for Which Cash Will Not

question 40

True/False

When a company sells services for which cash will not be received until some future date, the company should credit an unearned revenues account for the amount charged to the customer.

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Definitions:

Financial Flexibility

The ability of an organization to adapt its financing and investment strategies in response to changes in the marketplace or its own operations.

Fiscal Stress

A situation in which a government struggles to meet its financial commitments or to balance its budget.

Credit Worthiness

An assessment of a borrower's ability to repay debts based on their financial history, credit score, and other factors.

Abnormal Earnings

Profits exceeding or falling short of the normal expected earnings due to unusual or non-recurring items, not indicative of a company's ongoing operational performance.