Which Phase of the Accounting Process Involves Recognizing the Effect

question 46

Multiple Choice

Which phase of the accounting process involves recognizing the effect of transactions on assets,liabilities,owner's equity,revenue,and expenses of a business?

• A) input
• B) processing
• C) output
• D) summarizing

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Definitions:

Depreciation

A method of allocating the cost of a tangible asset over its useful life.

Short-Term Capital Loss

A loss realized from the sale of a capital asset, such as stock, held for one year or less, which can be used to offset capital gains for tax purposes.

Ordinary Loss

A loss incurred in the regular course of business or through investments, which can be used to offset ordinary income for tax purposes.

Section 1231 Loss

A loss from the sale or exchange of property used in a trade or business that can be deductible for tax purposes.