Revenue earned but not yet collected is termed ____________?
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Answer: D. Outstanding asset
Explanation
Revenue earned through provided services but not yet collected is an outstanding asset. Outstanding assets represent valid economic claims held against external parties. This classification ensures accrued revenues are recognized in the correct period. Accrual accounting requires recording revenues when earned regardless of cash receipts. Outstanding assets are commonly referred to as accrued income or receivables. These items appear as current assets on the corporate balance sheet.
Tracking accrued revenue ensures financial statements reflect true operational performance. Service providers frequently earn fees before issuing invoices or receiving payments. Auditors verify accrued revenue to prevent premature or fraudulent income reporting. Option A is incorrect because fictitious assets lack actual economic value. Option B is wrong since quick assets refer to liquid funds like cash. Option C is incorrect because real assets denote physical property holdings.
- Subject
- Accounting and Finance
- Category
- Accounting
- Topic
- —
- Difficulty
- medium
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