Which of the Following Transactions Would Be Appropriately Processed in the Sales/collection

question 3

Multiple Choice

Which of the following transactions would be appropriately processed in the sales/collection process?

• A)THT Corporation purchased merchandise on account from HRS Corporation.
• B)HRS Corporation received cash from THT Corporation for a previous sale on account.
• C)Both THT Corporation purchased merchandise on account from HRS Corporation and HRS Corporation received cash from THT Corporation for a previous sale on account.
• D)Neither THT Corporation purchased merchandise on account from HRS Corporation nor HRS Corporation received cash from THT Corporation for a previous sale on account.

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Definitions:

Effective Annual Rate

The annual return on an investment or loan taking compounding into account, expressed as a percentage.

Compounded Annually

This is an interest calculation method where interest is added to the principal once a year.

Effective Rate

The actual interest rate of an investment or loan, taking into account the effects of compounding.

Compounded Semi-Annually

Interest calculation method where the interest is added to the principal sum twice a year, causing the interest to earn interest.