Multiple Choice
The sticker price of an institute of higher education includes which of the following?
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1. Introduction to Accounting
Types of Accounting
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Which type of accounting is primarily concerned with recording and reporting transactions such as '90-days-same-as-cash' deals used to encourage the purchase of higher-priced items?
A
Tax Accounting
B
Financial Accounting
C
Managerial Accounting
D
Cost Accounting
Verified step by step guidance1
Understand the different types of accounting: Financial Accounting focuses on recording and reporting transactions for external stakeholders, Managerial Accounting is used for internal decision-making, Cost Accounting deals with cost analysis, and Tax Accounting focuses on tax-related matters.
Identify the nature of the transaction described: '90-days-same-as-cash' deals are promotional offers that impact the financial records of a company and are used to encourage sales.
Recognize that recording and reporting such transactions are primarily for external stakeholders, such as investors, creditors, and regulatory agencies, which aligns with the purpose of Financial Accounting.
Eliminate other options: Tax Accounting is not concerned with promotional sales transactions, Managerial Accounting is for internal use, and Cost Accounting focuses on cost analysis rather than promotional sales reporting.
Conclude that the correct type of accounting for recording and reporting '90-days-same-as-cash' deals is Financial Accounting.
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