ENTREPRENEURIAL PLANNING
FINANCIAL PLANNING AND ANALYSIS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The amount owed on your credit card is an example of a liability.
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true
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false
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -The balance owed on a credit card can be treated either as a negative asset, known as a “contra” asset, or as a liability. In this article we’ll explore the optional method of using liability accounts, however, there are several advantages to using the Contra Asset Approach.
Detailed explanation-2: -From the bank’s point of view, when a credit card is used to pay a merchant, the payment causes an increase in the amount of money the bank is owed by the cardholder. From the bank’s point of view, your credit card account is the bank’s asset.
There is 1 question to complete.