Which goods are sold on deferred credit basis.
(a) Capital (b) Consumer
(c) FMCG (d) Deferred
Answers
d)Deferred
Deferred credit—also known as deferred revenue, deferred income, or unearned income—is recorded on the balance sheet as a liability. Items that fall under this category include consulting fees, subscription fees, and any other revenue stream that is intricately tied to future promises.
(a) Capital goods are sold on a deferred credit basis.
What are capital goods?
Capital goods are forms of physical assets used by a company to produce goods or services used by the consumers later. It is the initial capital invested in forms of goods.
For example, building and machinery are the basic and common capital goods used by companies.
What is deferred credit?
Deferred credit is a form of income that is recorded at a later date. The element deferred credit is treated as a liability on the balance sheet.
- Capital goods are recorded on the basis of deferred credit.
- The treatment of capital goods is dependent on the deferred credit and which is why the sale of those goods depends on a deferred credit system.