PRC-1 · Chapter 10 · Question 58 of 100
A business receives Rs. 200,000 as a security deposit from a customer for equipment rented out. How should this security deposit be classified in the Statement of Financial Position?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) As a Liability.
Explanation
A security deposit received from a customer represents an obligation to return the funds when the equipment is safely returned, making it a liability for the business.
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