In Which of the Following Transactions Would It Not Be

question 12

Multiple Choice

In which of the following transactions would it not be appropriate to recognize an asset in the financial statements?

• A)SGG receives a firm commitment from another company to purchase goods from SGG.
• B)SGG pays $10,000 to a lawyer for services to be provided next year.
• C)SGG provides services to another company, but will not be paid until after year end.
• D)A customer of SGG makes a deposit of $1,500 for goods to be custom-made.

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Definitions:

Individual Budgets

Specific financial plans for departments, projects, or activities within a company, detailing expected revenues and expenses.

Selling Expenses Budget

This refers to a detailed plan that outlines all the expenses associated with the selling activities of a business over a specific period.

Sales Budget

A detailed forecast of a company's sales revenue expected to be generated in a specific time period.

Activity-Based Budgeting

A budgeting method where activities that incur costs in every department of an organization are recorded and their budgets are prepared.