An Accounting Supervisor Informs a College Co-Op Student to Record

question 12

Multiple Choice

An accounting supervisor informs a college co-op student to record sales even though the customers will pay in the future.What kind of accounting does the company use?

• A) cash-basis
• B) accrual-basis
• C) revenue-basis
• D) sales-basis

---

Definitions:

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on part of the corporation's profits.

Journal Entry

A record in accountancy that captures the financial transactions of a company, showing the accounts affected and in which direction (debit or credit).

Convertible Securities

Financial instruments, such as bonds or preferred shares, that can be converted into a company’s common stock.

Diluted EPS

Earnings per share calculated by including all convertible securities, warrants, options, and other financial instruments that could potentially dilute the earnings per share if exercised.