Receiving payment prior to delivering goods or services causes a current liability to be incurred.

Name: Receiving payment prior to delivering goods or services causes a current liability to be incurred.
Brand: Quizplus
Rating: 4.8 (32 reviews)

Question

Quizplus · Accepted Answer

When a customer pays in advance, a liability is created because the business has an obligation to fulfill the order and deliver the goods or services paid for. Until the delivery is made, the payment received is considered a current liability.

Receiving Payment Prior to Delivering Goods or Services Causes a Current