A Transaction That Would Include a Credit to Cash Is

question 20

Multiple Choice

A transaction that would include a credit to Cash is:

• A)the purchase of supplies on account.
• B)the payment of an account payable.
• C)the collection of cash from an account receivable.
• D)provide services and receive cash from the customer.

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Definitions:

Temporary Investments

Investments not intended to be held for a long term, such as stocks or bonds, purchased with the intention of selling in the near future.

Accounts Receivable

Money that is owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Quick Ratio

A liquidity measure that indicates a company’s ability to pay its current liabilities without relying on the sale of inventory, calculated as (current assets - inventories) / current liabilities.

Liability Likelihood

Refers to the probability that a company will be responsible for payment due to a debt, claim, or lawsuit.