Which of the Following Types of Transactions May Not Typically

question 28

Multiple Choice

Which of the following types of transactions may not typically be accounted for using the cash method?

• A) sales of inventory.
• B) payments of debt.
• C) services.
• D) purchases of machinery.
• E) sales of securities by an investor.

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Definitions:

Known Liabilities

Obligations that are quantifiable, and the company is aware of, including debts and other financial responsibilities that appear on the balance sheet.

Employee Earnings Report

A detailed record that shows the amount of money an employee has earned over a particular period, including wages, bonuses, and deductions.

Gross Earnings

The total amount of money earned by an individual or organization before any deductions are made.

Contingent Liabilities

Contingent liabilities are potential liabilities that may occur depending on the outcome of a future event, and are recorded in the company's financial statements if probable and estimable.