A liability for a deposit may arise because
A)cash deposits are received from customers for layaways.
B)cash is paid as a security deposit that will be refunded in the future.
C)the company deposits sales receipts too early.
D)merchandise is delivered to customers prior to payment.

Question

Quizplus · Accepted Answer

A liability for a deposit arises when a company receives cash from customers before delivering goods or services, such as in the case of layaways. This creates an obligation to either deliver the goods or refund the money.

A Liability for a Deposit May Arise Because