A Receivable from the Sale of Merchandise on the Basis

question 156

Multiple Choice

A receivable from the sale of merchandise on the basis of a draft or bill of exchange drawn against the buyer or the buyer's bank is termed a (n) :

• A) acceptance
• B) assignment
• C) co-maker loan
• D) warehouse loan

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Definitions:

Deferred Expense

A deferred expense is an expenditure that is made in advance and recorded as an asset until it is consumed or its value expires, at which point it is charged to expense.

Accrual Basis

An accounting method where transactions are recorded when they are earned or incurred, regardless of when cash is exchanged.

Matching Concept

An accounting principle that requires the expenses to be matched with the revenues they helped to generate in the same accounting period.

Cash Is Received

The acquisition of monetary funds through various means, such as sales, financing, or donations.