Consider the Following Transactions

question 5

Multiple Choice

Consider the following transactions.
(i) Collect $100 000 from accounts receivable.
(ii) Receive $80 000 from a client for work to be done in the next accounting period.
(iii) Inventory (costing $50 000) sold on credit for $90 000.
(iv) Shares issued for $1 million.
Which of the above transactions do NOT increase revenue?

• A) (i)and (ii)only
• B) (ii)and (iii)only
• C) (i)and (iii)only
• D) (i),(ii)and (iv).

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Definitions:

Bailed Property

Personal property that has been transferred to another under a bailment agreement, where the receiver has a duty to return or handle the property as directed.

Compensation

Payment or benefit given, often to employees or in settlement of a claim, for services rendered, loss suffered, or injury incurred.

Superior Claim

A legal assertion that some interests or rights (such as those in property) are ranked higher than others, giving them priority in being honored or executed.

Harvester

An individual or machine that gathers crops or other natural resources from fields or natural habitats.