Question

I paid 200 in advance for some hair coloring I will do in January. The hairstylist tells me that's a liability. Is this statement:

a) True
b) False

Answer 1

The hairstylist's statement is true: the $200 advance payment for hair coloring is a liability.

Step-by-step explanation:

According to the information provided, the hairstylist's statement is TRUE: the $200 payment made in advance for hair coloring in January is classified as a liability. A liability is a financial obligation or debt that a company owes, which in this case is the hairstylist's obligation to provide the hair coloring service in the future. The advance payment represents an unearned revenue for the hairstylist, as the service has not yet been provided.