The One Characteristic That All Entries Recorded in a Cash

question 21

Multiple Choice

The one characteristic that all entries recorded in a cash receipts journal have in common is

• A) a credit to the Cash account.
• B) that they all represent collections from customers.
• C) that they originate from the sales of merchandise.
• D) a debit to the Cash account.

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Definitions:

Income Summary

An account in which revenues and expenses are summarized, showing the net income or loss for a specific period before closing entries are made.

Net Income

Net income is the total revenue minus total expenses of a business, showing the company's profit during a specific period.

Correcting Entries

Journal entries made to amend previously recorded transactions that were incorrect or incomplete.

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell it to customers, and collect the cash from these sales.