How are customer deposits reflected in the general ledger before the goods or services are delivered?

Customer deposits are considered liabilities in the general ledger before the goods or services are delivered because they represent an obligation for the business. When a customer makes a deposit, they are providing cash in advance for goods or services that have not yet been rendered. This creates a liability for the company, as it is obligated to either deliver the goods or services in the future or refund the deposit if for some reason the transaction does not proceed.

Recording customer deposits as liabilities reflects the company's future responsibility to fulfill the customer’s order or return the deposit. This approach aligns with the accounting principle of matching, where income and expenses are recognized in the periods in which they occur, ensuring the financial statements accurately represent the company’s obligations to its customers.