Accounting does not normally recognize mutually unexecuted contracts as assets or liabilities.

Name: Accounting does not normally recognize mutually unexecuted contracts as assets or liabilities.
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Question

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Accounting only recognizes assets and liabilities that have been executed or fulfilled, meaning that there has been an exchange of goods or services or a definite agreement has been made. Mutually unexecuted contracts do not meet these criteria and therefore are not recognized as assets or liabilities.

Accounting Does Not Normally Recognize Mutually Unexecuted Contracts as Assets