Issuing a Purchase Order Is Part of Which Transaction Cycle

question 50

Multiple Choice

Issuing a purchase order is part of which transaction cycle?

• A)the revenue cycle
• B)the expenditure cycle
• C)the human resources cycle
• D)the production cycle

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Definitions:

Temporary Account

A temporary account is an account that is closed at the end of each accounting period, with its balance transferred to a permanent account.

Real Accounts

Accounts related to assets, liabilities, and equity that are not closed at the end of the accounting period.

Nominal Accounts

Accounts that are closed at the end of each accounting period, including revenue, expense, and withdrawal accounts, which are used to calculate the period's net income or loss.

Income Summary

An account in the ledger that is used to summarize the revenue and expenses of a period, facilitating the transfer of their net effect to retained earnings.