Sales Is A(n)________ Account

question 23

Multiple Choice

Sales is a(n) ________ account.

• A)asset
• B)liability
• C)revenue
• D)contra-

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Definitions:

Vertical Analysis

A financial statement analysis method where each entry for each of the three major categories of accounts (assets, liabilities, and equities) in a balance sheet is represented as a proportion of the total account.

Cost Of Goods Sold

Refers to the total expense directly related to the production of goods or services a company sells.

Current Ratio

A liquidity ratio; current assets are divided by current liabilities to indicate a company’s ability to pay its short-term debt. This ratio does not provide as much certainty as the acid test ratio.