List three ways you can reduce or avoid credit costs.
Accounting Week 5 The book value of an asset is the cost of the asset minus the acquired depreciation. Deferred revenues occur when a company receives in advance from customers Cash received is initially recorded as a liability Netflix is a good example of a company that receives deferred revenue because the customers pay for their services in advance. Because of that, the cash is initially recorded as a debit to liability, and then converted to an asset as the service is provided. After that, it is a debit to referred revenue. Accrued expenses are recorded when a company has a cost that used to obtain revenue that has not been paid just yet With accrued expenses, there is an implication of loans so that there is “cash” paid up front, but not nece