Which of the Following Transactions Is Represented by the Diagram

question 71

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:

Ending Inventory

The financial valuation of items for sale at the conclusion of a financial period, figured by starting with the beginning inventory, adding purchases, and then deducting the cost of goods sold.

Purchased

Refers to goods or services obtained by paying money or its equivalent.

Master Budget

A comprehensive financial planning document that includes all of an organization's budgets, combining sales, production, and financial budgets to project overall financial activities.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, often used by companies to manage liquidity and ensure sufficient cash on hand.