Which of the following operating activities is not correctly matched with the current liability that results from the activity?
A)Purchase inventory of goods to be sold » Accounts payable
B)Employees earn wages » Accrued wages.
C)Customers pay in advance for future purchases » Accounts receivable.
D)Rent warehouse space to store goods » Accrued rent.

Question

Quizplus · Accepted Answer

Customers paying in advance for future purchases would result in a current liability of unearned revenue, not accounts receivable. Accounts receivable is created when a company sells goods or services to a customer on credit and expects payment at a later date.

Which of the Following Operating Activities Is Not Correctly Matched