A Deposit Received by an Entity in Advance of Goods

question 49

Multiple Choice

A deposit received by an entity in advance of goods or services being supplied is initially classified as:

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

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Definitions:

Substitute Goods

Products or services that can be used in place of one another, satisfying similar needs or desires.

Complementary Goods

are products or services that are used together, where the use or consumption of one increases the demand for the other.

Close-Substitute

A good or service that can easily replace another in satisfying consumer needs, with very little change in consumption patterns.

Consumer Preferences

The tastes, preferences, and priorities that individuals have regarding the consumption of goods and services.