Question

Transaction cycles can be summarized on a high level as "give-get" transactions. An example of "give-get" in the revenue cycle would be

A) give cash, get goods.
B) give goods, get cash.
C) give cash, get labor.
D) give cash, get cash.

Answer 1

In the revenue cycle, the 'give-get' transaction that fits best is 'give goods, get cash', aligning with the circular flow diagram where firms give goods and receive cash from households.

Step-by-step explanation:

Transaction cycles involve a series of give-and-get interactions between parties. Typically, these are the financial transactions that take place in business operations. In the context of the revenue cycle, a 'give-get' transaction would be exemplified by the exchange where a company gives goods and in return, gets cash. This aligns with the concept presented in the circular flow diagram where in the goods and services market, households (or consumers) receive goods and services and pay firms for them. Therefore, in relation to the choices given, option B) give goods, get cash most accurately represents a 'give-get' transaction within the revenue cycle.