Identifying Business Activities Requires Selecting Transactions and Events Relevant to an Organization.Which

question 175

Multiple Choice

Identifying business activities requires selecting transactions and events relevant to an organization.Which of the following events would be recorded in the accounting records of Acme Car Wash?

• A)Acme washes 500 cars.
• B)J.B.Smith,a customer,buys lunch at the restaurant next door to Acme while waiting for her car to be washed.
• C)Clean Company,a supplier,sells 50 pounds of soap to ABC Company.
• D)Sudsey Company,a supplier,goes out of business.
• E)Acme hires Andrea as a receptionist.

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Definitions:

Consideration

Something of value exchanged by parties in a contract that induces them to enter into the agreement.

Trustee

A legal entity or person appointed to manage and administer property or assets for the benefit of a third party.

Testamentary Trust

A trust that is created according to the instructions in a will, coming into effect upon the death of the person who created the will.

Administrator of the Estate

An individual appointed by a court to manage and distribute the assets of a deceased person's estate when there is no will.