Performing a Service for Cash Would

question 100

Multiple Choice

Performing a service for cash would:

• A)affect the accounting equation the same as if the service was performed on account.
• B)increase assets more than if the service had been performed on account.
• C)increase net income less than if the service had been performed on account.
• D)decrease expenses more than if the service had been performed on account.

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Definitions:

Cash Flows

The net amount of cash and cash-equivalents being transferred into and out of a business.

Controller

A senior financial officer within a company responsible for overseeing accounting operations, financial reporting, and internal controls.

Operating Cycle

The duration of time from the purchase of inventory to the collection of receivables from the sale of that inventory, critical for managing cash flow.