What Is the Worst Thing That Could Happen to Small

question 83

Multiple Choice

What is the worst thing that could happen to small business owners who use credit cards as a source of financing?

• A) They might have to get a second credit card to pay for additional expenses.
• B) They might need to significantly increase their revenues.
• C) They might pay fines for using personal cards for business purchases.
• D) They might spend more than they can afford to pay back.
• E) They might need to ask for an increase in their credit limit.

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Definitions:

Periodic Method

A method of inventory accounting where updates to inventory levels and cost of goods sold are made at the end of an accounting period.

Gross Method

An accounting method where purchases are recorded at their full purchase price without deducting any cash discounts.

Periodic Inventory Method

An accounting practice where inventory levels and cost of goods sold are calculated at predetermined intervals, such as monthly or annually.

Voucher System

A control mechanism in accounting that uses vouchers to record transaction details and authorize cash disbursements.