BD One Company Entered into the Following Transactions

question 38

Multiple Choice

BD One Company entered into the following transactions. Choose the one which represents an accounting error.

• A) A shareholder of BD One Company purchases a new car, but this was not recorded by the company.
• B) Revenue was recognized when a customer received services from BD One Company.
• C) Cash received from a customer in payment of his account was debited to Cash and credited to Accounts Receivable.
• D) BD One Company ordered inventory and the order was recorded by a debit to Inventory and a credit to

---

Definitions:

Price Level

A calculation of the current average prices for a comprehensive range of goods and services in the economy, usually tracked through a price index.

Real Output

The quantity of goods and services produced in an economy, adjusted for inflation, reflecting the actual productivity.

Expected Inflation Rate

The anticipated rate at which the general level of prices for goods and services will rise over a period.

Velocity of Money

The rate at which money circulates in the economy, typically measured as the ratio of nominal GDP to the money supply.