Which One of the Following Statements Concerning the Accounting Cycle

question 86

Multiple Choice

Which one of the following statements concerning the accounting cycle is incorrect?

• A) The accounting cycle includes journalizing transactions and posting to ledger accounts.
• B) None of the steps in the accounting cycle are optional.
• C) The steps in the accounting cycle are performed in sequence.
• D) The steps in the accounting cycle are repeated in each accounting period.

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Definitions:

Purchases Discounts

Discounts taken by the buyer for early payment of an invoice.

Current Liability

Financial obligations due by a company within a year, including loans, accounts payable, and other short-term debts.

Current Asset

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business, whichever is longer.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company in generating sales revenue from its investments in assets.