When Cash is paid after the cost is incurred to generate revenue,costs are stated as:

Question

Quizplus · Accepted Answer

If cash is paid after the cost is incurred to generate revenue, it means that there is an obligation to pay for that cost in the future. This obligation is classified as a liability on the balance sheet until the cash is paid. It is important to note that the cost itself is not an asset because it has already been used up to generate revenue. Therefore, the best choice in this scenario would be A) Liability.

When Cash Is Paid After the Cost Is Incurred to Generate