Mastering Financial Transactions
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Questions and Answers

Which of the following is NOT considered a common financial transaction?

  • The discharge of financial obligations
  • The transfer of inventory from one department to another (correct)
  • The sale of goods
  • The purchase of inventory

    • What are some examples of internal financial transactions mentioned in the text?

  • The purchase of inventory
  • The receipt of cash on account from customers
  • The depreciation of fixed assets (correct)
  • The sale of goods or services

    • Why do business firms group similar types of transactions into transaction cycles?

  • To reduce the number of financial transactions
  • To prioritize certain types of transactions
  • To avoid dealing with high volumes of transactions
  • To increase the efficiency of financial transactions (correct)

    • How often do common business events, such as sales to customers, occur?

    <p>Daily</p> Signup and view all the answers

    What are some examples of economic exchanges with external parties mentioned in the text?

    <p>The sale of goods or services</p> Signup and view all the answers

    Which of the following best describes the flow of cash in the expenditure cycle?

    <p>Cash is disbursed after the receipt of goods or services.</p> Signup and view all the answers

    What is the primary basis for most expenditure transactions?

    <p>Credit</p> Signup and view all the answers

    How much time may pass between the receipt of goods or services and the disbursement of cash in the expenditure cycle?

    <p>Weeks</p> Signup and view all the answers

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