Asked by Janysh Kudaibergenov on Jul 16, 2024
Verified
The finance function and the accounting function look at the sale of product to a customer on credit in different ways. Which of the following best describes that difference?
A) Accounting views the sale as a completed transaction to be recorded as revenue while finance views it as incomplete until the cash is received.
B) Finance views the sale as a completed transaction to be recorded as revenue while accounting views it as incomplete until the cash is received.
C) Accounting is more interested in the cash inflows and outflows than finance.
D) Finance is more interested in reporting the appropriate transactions in the proper time period than accounting.
Accounting Function
The process of recording, summarizing, analyzing, and reporting financial transactions of a business to oversight agencies, regulators, and the IRS.
Finance Function
The role within a company that encompasses tasks related to managing finances, including treasury, budgeting, and financial reporting.
Sale Of Product
Sale of product refers to the transaction in which a business sells its physical goods to a customer in exchange for payment.
- Differentiate between the finance and accounting perspectives within a business.
Verified Answer
AB
ahmad barakatJul 21, 2024
Final Answer :
A
Explanation :
Accounting records the sale as revenue because it has met the revenue recognition criteria. Finance, however, sees the sale as incomplete until the cash is received as it affects the cash flow and liquidity of the company.
Learning Objectives
- Differentiate between the finance and accounting perspectives within a business.