Sales Transactions Should Be Documented at Initiation in Order to Accomplish

question 59

Multiple Choice

Sales transactions should be documented at initiation in order to accomplish which of the following objectives?

• A)To provide the customer a copy of the transaction.
• B)To provide evidence of authorization and recording.
• C)To offer credit to customers.
• D)To generate back orders.

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Definitions:

Inventory Account

An asset account on the balance sheet that reports the value of a company's inventory, which includes goods that are in the process of being produced for sale and finished goods.

Perpetual Inventory System

A method of continuously tracking inventory levels, costs, and sales in real time, reducing the need for physical inventories.

Purchases Account

An account used in an accounting system to record the purchase of goods or services that a business intends to resell.

FOB Destination

In this shipping term, the seller retains the risk of loss until the goods reach the buyer's location.