Revenue received before services are performed and expenses paid before being used or consumed are both initially recorded as liabilities.

Name: Revenue received before services are performed and expenses paid before being used or consumed are both initially recorded as liabilities.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Revenue received before services are performed is initially recorded as a liability (unearned revenue), but expenses paid before being used or consumed are initially recorded as assets (prepaid expenses).

Revenue Received Before Services Are Performed and Expenses Paid Before