When Companies Record Transactions in the Period in Which the Events

question 269

Multiple Choice

When companies record transactions in the period in which the events occur, ______ is being applied.

• A) accrual-basis accounting.
• B) the time period assumption.
• C) the matching of the income statement with the statement of financial position.
• D) the expense recognition principle.

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Definitions:

Inventory Sale

The process of selling goods from a company's inventory to generate revenue, often tracked to understand sales trends and inventory turnover.

Amount Owed

The total sum of money that is due for payment to a lender or creditor.

Operating Cycle

The average period of time between the acquisition of materials or services and the final cash realization from those activities in a company.

Accounts Receivable Period

Accounts Receivable Period is the average number of days it takes for a company to collect payment from its customers after a sale has been made.