Answer to Question #243037 in Accounting for samantha

Question

1. Which of the following attributes will classify an item which can be seen as a liability in

the Statement of Financial Position?

a.Expenses paid before the actual utilization

B. Expenses already utilized and paid for.

c.Expenses already utilized but have not yet paid for

D. All expenses cannot be classified as a liability component

2. What is the most correct definition of Cost of Goods Sold?

a.This is the cost associated with advertising the product we are selling

b.This is the cost associated with manufacturing the product we are selling

c.This is the cost associated with finances and other incurrences from interest

d.This is the cost associated with office expenses which are periodic in nature

3. Define an Unearned Revenue and discuss why this account is not yet a revenue.

Answer 1

Answers

1)C.Expenses already utilized but have not yet paid for

2)B.This is the cost associated with manufacturing the product we are selling

3)Unearned revenue is payment received by a company from a customer for products or services that will be delivered at some point in the future.

This account is not yet a revenue because it has not been earned and represents products or services owed to a customer.

It is treated as a liability in the statement of financial position, as the prepaid service or product is gradually delivered over time, it is recognized as revenue on the income statement.