Pawn Shops Unlimited Recorded the Following Four Transactions During April

question 150

Multiple Choice

Pawn Shops Unlimited recorded the following four transactions during April.Which of these transactions would have the same income statement impact in April regardless of whether the company used accrual-basis or cash-basis accounting?

• A)Received $600 from customers for services to be provided in May.
• B)Paid $1,800 for a six-month insurance policy covering the period July 1-December 31.
• C)Paid $700 for an advertisement that appeared in the April 17 edition of the Las Vegas Sun newspaper.
• D)Received $300 from customers for services performed in March.

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Definitions:

Business Strategy

Deals with how the firm will compete in each market where it conducts business.

Retrenchment

The act of reducing costs or spending in response to economic difficulty, often involving layoffs or downsizing of an organization.

Prospector Strategy

A business approach focused on innovation, seeking out new markets and opportunities, characterized by flexibility and a readiness to adapt to changing environments.

Artistic Risks

The undertaking of new, unconventional, or controversial projects or ideas in the realm of art, challenging established norms and potentially leading to innovative breakthroughs.