The Finance Function and the Accounting Function Look at the Sale

question 61

Multiple Choice

The finance function and the accounting function look at the sale of product to a customer on credit in different ways. Which of the following best describes that difference?

• A)Accounting views the sale as a completed transaction to be recorded as revenue while finance views it as incomplete until the cash is received.
• B)Finance views the sale as a completed transaction to be recorded as revenue while accounting views it as incomplete until the cash is received.
• C)Accounting is more interested in the cash inflows and outflows than finance.
• D)Finance is more interested in reporting the appropriate transactions in the proper time period than accounting.

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Definitions:

Shortages

A situation in which the demand for a product or service exceeds the supply available at a particular price.

Quantity Supplied

Refers to the amount of a good or service that producers are willing and able to sell at a given price during a specific period.

Quantity Demanded

The amount of a good that buyers are willing and able to purchase at a specific price.

Quantity Demanded

The overall volume of a commodity or service that consumers are ready and able to buy at a certain price within a market.