Final answer:
The billing of a customer for $3,000 for sustainability services reflects revenue recognition. This occurs when a company has performed a service and can recognize the billed amount as income. It is separate from accounts payable, accrued expenses, and long-term liabilities.
Step-by-step explanation:
When a company bills a customer for services provided, such as sustainability services for $3,000, it is an example of revenue recognition. Revenue recognition is an accounting principle that dictates the conditions under which revenue is recognized and recorded. In this case, the company has performed the service and has the right to receive payment, so it recognizes the amount billed as revenue.
In contrast, accounts payable would be used if the company owes money to its suppliers, accrued expenses involve expenses that have been incurred but not yet paid, and long-term liabilities refer to debts or obligations that are due in a period longer than one year.
Relating to the provided reference, if a pollution charge is set to $1,000, a firm would prefer to reduce pollution to save on costs, as reducing pollution by 30 pounds would cost $900, which is less than paying the pollution charge. This economic decision similarly emphasizes the firm's cost and revenue considerations.