When Thandile and Rebecca Allow a Customer to Buy on Credit

question 103

Multiple Choice

When Thandile and Rebecca allow a customer to buy on credit, which account increases?

• A)Debt
• B)Inventory
• C)Trade and other payables
• D)Trade receivables

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Definitions:

Unrealized Gain/Loss

A profit or loss that results from holding an investment that has not yet been sold, and thus, the gain or loss is not reflected in the financial statements.

Government Bonds

Debt securities issued by a government to support government spending, considered low-risk investments since they are backed by the taxing power of the issuing government.

Corporate Bonds

Debt securities issued by corporations to finance their operations, which pay interest to investors until maturity.

Available-For-Sale

A classification of securities which are not actively traded by the company, with changes in value reported in other comprehensive income.