The Asset Created by a Business When It Makes a Sale

question 147

Multiple Choice

The asset created by a business when it makes a sale on account is termed

• A) accounts payable
• B) prepaid expense
• C) interest revenue
• D) accounts receivable

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Definitions:

Swap Contract

A financial derivative agreement between parties to exchange cash flows or other financial instruments over a specified time period.

Bond Discount

The discrepancy between a bond's nominal value and its selling price that occurs when the bond is retailed at a price lower than its nominal value.

Debt Extinguishment

Refers to the process of permanently removing a debt obligation through payment or other financial arrangements.

Maturity Value

The amount payable to an investor at the end of a bond's term or an investment's life.