A Business Transaction Has Occurred When

question 50

Multiple Choice

A business transaction has occurred when:

• A)an event affects the entity's financial position.
• B)the event can be reliably measured.
• C)the accountant determines that the event is important enough to be a business transaction.
• D)both A and B occur.

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Definitions:

Net Credit Sales

The total amount of sales made on credit minus returns and allowances, representing actual sales revenue.

Matching Concept

An accounting principle that dictates expenses should be matched with the revenues they help to generate within the same accounting period.

Clearinghouse Collection Fee

A charge levied by a clearinghouse for handling the processing and settlement of transactions between financial institutions.

Credit Card Sales

Transactions in which customers use credit cards to pay for goods or services, creating a receivable for the seller until payment is processed by the card issuer.