An Account That Is Always Deducted from a Related Account

question 41

Multiple Choice

An account that is always deducted from a related account is known as a:

• A) contra account.
• B) temporary account.
• C) carrying account.
• D) negative account.

Understand accounting for merchandise transactions using the gross and net methods.

Calculate gross profit, net income, and understand their implications on financial performance.

Apply knowledge of periodic and perpetual inventory systems in accounting entries.

Understand and calculate discounts, including sales discounts and purchase discounts.

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Definitions:

Exchange Rate

The price of one currency in terms of another currency for conversion.

Currency

A system of money in general use in a particular country or region, serving as a medium of exchange, unit of account, and store of value.

Arbitrageur

Someone who takes advantage of tiny differences in the exchange rate across markets by simultaneously purchasing a currency in one market and selling it in another market.

Foreign Exchange

Trading one currency for another or transforming one currency into a different currency.