Single-Entry Accounting Systems Record the Flow of Income and Expenses

question 45

Multiple Choice

Single-entry accounting systems record the flow of income and expenses in a running log and allow the small business owner to produce

• A) An income statement
• B) A balance sheet
• C) A statement of cash flows
• D) Monthly statements

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Definitions:

Product Cost Method

An accounting method used to assign costs to inventory and cost of goods sold, including direct materials, direct labor, and manufacturing overhead.

Differential Cost

The difference in total cost between two alternatives in making a business decision.

Differential Revenue

The difference in revenue generated from two different business actions or decisions, helping to assess the financial impact of each choice.

Contribution Margin

The difference between sales revenue and variable costs, used to cover fixed costs and to generate profit.