Which of the Following Is an Example of an Operating

question 68

Multiple Choice

Which of the following is an example of an operating activity?

• A)Obtaining capital from owners
• B)Selling goods and services to customers
• C)Purchasing equipment
• D)Selling land

Grasp the significance of verifying audit results and the standards for information reliability and validity.

Acknowledge the difference between ethics planning and implementation, and the potential consequences of focusing on one more than the other.

Understand legal frameworks related to financial and ethics auditing, including the Sarbanes-Oxley Act.

Recognize the role of stakeholders in the ethics-auditing process.

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Definitions:

Bad Debt Expense

An expense reported on the income statement, representing the amount of non-collectible accounts receivable during a period.

Direct Write-off Method

An accounting method where bad debts are expensed only when they are deemed uncollectible.

Allowance Account

An account used to record adjustments for potential future losses or defaults on receivables, essentially reducing the value of accounts receivable to a more realistic figure.

Accounts Receivable

Debts incurred by customers to a company for using or obtaining its goods or services without making immediate payment.