When a fiRm Writes a Cheque, There Is an Immediate

question 25

Multiple Choice

When a firm writes a cheque, there is an immediate decrease in _____ cash, but no immediate change in _____ cash.

• A)bank; collected
• B)ledger; book
• C)bank; ledger
• D)book; bank
• E)None of the above

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Definitions:

Sales Discounts

A promotional strategy where the seller reduces the price of products or services to attract more customers or encourage quick payment.

Sales Tax

A percentage of the selling price of goods and services, collected by sellers and remitted to the appropriate tax authority.

Liability Account

An accounting record that captures the amounts a company owes to others.

Gross Sales

represent the total sales revenue before any deductions are made for returns, allowances, or discounts.