A Transaction That Decreases an Asset Account and Increases a Liability

question 125

True/False

A transaction that decreases an asset account and increases a liability account must also affect one or more other accounts.

Identify the importance and implications of title insurance for property buyers.

Comprehend the governmental authority in property acquisition and the limitations imposed by the U.S. Constitution.

Understand water rights and the legal implications of diverting water in relation to other landowners.

Recognize the significance of marketable titles and the impact of liens on property ownership and transactions.

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Definitions:

Cash Cycle

The period between the outlay of cash for purchases and the collection of cash from customers in a business.

Inventory Turnover

A ratio showing how many times a company has sold and replaced inventory over a period.

Accounts Payable Turnover

A financial ratio that measures the rate at which a company pays off its suppliers by comparing net purchases to average accounts payable during a period.

Accounts Receivable Period

The Accounts Receivable Period is the average number of days it takes for a business to receive payments from its customers for goods or services sold on credit.