Which of the Following Is an Example of an Accounting

question 5

Multiple Choice

Which of the following is an example of an accounting transaction?

• A) A bank overdraft limit of $500 000 is arranged with the bank manager.
• B) An accountant is hired at an annual salary of $80 000.
• C) The company is awarded a contract to build a bridge,with construction to commence in 12 months' time.
• D) The payroll department issues a cheque to pay an employee.

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Definitions:

Contribution Format

An income statement format that separates fixed costs from variable costs to highlight the contribution margin.

Target Profit

The expected profit levels set by management for a specific period, guiding pricing and sales strategies.

Income Statement

An account documenting an organization's economic activity, showing income, outlays, and net gains or deficits over a distinct timeframe.

Net Operating Income

This refers to a company's income after all operating expenses, but before interest and taxes, are subtracted from total revenue.