If There Is No Cash Involved in a Particular Business

question 92

Multiple Choice

If there is no cash involved in a particular business transaction then the transaction should be recorded in:

• A)either cash receipts journal or general journal.
• B)either sales journal or purchases journal.
• C)only general journal.
• D)sales journal, purchases journal, or general journal.

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Definitions:

Accrual

An accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur.

Net Cash Inflow

The difference between all cash received and all cash spent by a company during a specific period.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, not including cash equivalents.

Loans Receivable

Financial assets representing money lent by an entity to a third party, for which the lender expects repayment.