Which of the Following Transactions Is Represented by the Diagram

question 35

Multiple Choice

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

• A)A lumber yard where customers may pay with cash for all purchases.
• B)A buy-here-pay-here auto dealer where a car buyer sends monthly cash payments to the dealer.
• C)A consulting firm that offers a variety of consulting services to other businesses.
• D)A department store that allows customers to carry a balance and to make installment payments,if they choose.

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Definitions:

Trial Balance

An accounting report that lists the balances of all ledgers accounts in order to ensure that total debits equal total credits.

Financial Transaction

A financial transaction refers to an agreement, or communication between a buyer and seller to exchange an asset for payment. It involves a change in the status of the finances of two or more businesses or individuals.

Unearned Revenue

Income received by an entity for services yet to be rendered or goods yet to be delivered; also known as deferred revenue.

Liability

Any type of financial debt or obligation that a company or individual owes to another party.