Ink Spill, a printing company, provides printing services to its customers. Customers normally pay for printing services in advance. In October 2020, Ink Spill received $20,000 from customers for services to be provided in November 2020. A senior accountant at Ink Spill wants to record the full amount as a liability in the companys Balance Sheet at the end of October 2020.

Required:

Should the $20,000 be recorded as a liability in the companys Balance Sheet at the end of October 2020? Explain, using the definition and recognition criteria of a liability in your explanation.