If an Entity Receives a Deposit in Advance of Goods

question 8

Multiple Choice

If an entity receives a deposit in advance of goods or services being supplied, the deposit is initially classified as:

• A) an asset.
• B) revenue.
• C) a liability.
• D) an expense.

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Definitions:

Statute Of Limitations

Regulations defining the ultimate deadline by which lawsuits must be filed following an incident.

Criminal Prosecutions

The process of charging someone with a crime and carrying out a trial to determine their guilt or innocence.

Seriousness Of Offense

The level of gravity or severity associated with a criminal act or violation of law.

Specific Performance

A legal remedy where a court orders a party to perform their exact obligations under a contract rather than awarding monetary damages for a breach.