Choose the Word or Phrase in [ ] Which Will

question 146

Short Answer

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-A proper use of open account credit would be to buy a [food | washing machine].

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Definitions:

Trade Receivables

The total amount of money owed to a company by its customers for goods or services delivered on credit.

Dishonored Note

A promissory note that has not been paid by its maker or endorser at the time of maturity.

Selling Receivables

The process of selling a company's accounts receivable to a third party to improve liquidity and reduce the risk of uncollectible debts.

Voucher System

A control mechanism in accounting that requires all company expenditures to be documented with vouchers, supporting the authenticity of transactions.