CAF-6 · Chapter 5 · Question 14 of 15
A company receives a non-refundable upfront fee for joining a health club. No services are provided yet. This should be recorded as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Contract Liability
Explanation
If a customer pays consideration before the entity transfers a good or service, the entity recognizes a contract liability.
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