Answer to Question #250989 in Economics for mei

Question

Which of the following should not be recorded in the company's accounting records:

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aThe company CEO signed a lease for the use of a new office building.

bCash is collected from a customer for the purchase of a product.

cA new employee is paid for her first week of work.

dA lawyer is paid in advance for future services to be provided to the company.

Answer 1

If a lawyer is paid in advance for future services to be provided to the company, then this transaction should not be recorded in the company's accounting records until he provide services.

So, the correct answer is d.