Which of the Following Transactions Decreases the Quality of Income

question 114

Multiple Choice

Which of the following transactions decreases the quality of income ratio?

• A)The cash purchase of equipment.
• B)The issue of stock in exchange for cash.
• C)Collecting cash for services to be provided in the future.
• D)Earning revenue that was previously recorded as unearned revenue.

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Definitions:

Decision-Making Process

A series of steps a person or organization takes to come to a conclusion and take action, from identifying a problem to evaluating the outcomes of the chosen solution.

Clarify

To make a statement or situation less confused and more comprehensible.

Criterion

A standard or rule by which something can be judged or decided.

Timely Information

Information received or provided at an appropriate time to influence decision-making.