The Asset Created by a Business When It Makes a Sale

question 120

Multiple Choice

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

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

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Definitions:

Financing Activities

Transactions related to raising capital and repaying shareholders, including issuing equity, obtaining loans, and paying dividends.

Investing Activities

Transactions that involve the purchase or sale of long-term assets and investments are considered investing activities.

Non-current Assets

Non-current assets are long-term resources owned by a company, expected to provide economic benefits beyond one year, such as property, plant, and equipment (PP&E), and intangible assets.

Direct Method

A cash flow statement presentation that lists major categories of gross cash receipts and payments.