Which of the Following Transactions Is Represented by the Diagram

question 46

Multiple Choice

Which of the following transactions is represented by the diagram below?

• A)A junkyard holds weekly sales where it sells its entire inventory.
• B)A shoe store sells products to consumers.
• C)A stay-at-home mom creates furniture for doll houses.When one piece is finished,she sells it on Amazon.com.
• D)Netflix sells movies to consumers through its online downloading service.

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Definitions:

Profit-Oriented Enterprise

An organization that operates with the primary goal of earning profits, as opposed to non-profit organizations.

Not-for-profit Organization

An entity that operates for purposes other than generating profit for owners or shareholders, focusing instead on a mission or specific group of people.

Equity Method

An accounting approach used for recording investments in associate companies where the investment is initially recognized at cost and adjusted thereafter for the post-acquisition change in the investor's share of the net assets of the investee.

Profit-Oriented Entity

A business whose primary goal is to generate profits rather than focusing on other goals such as social impact or environmental sustainability.