Purchases on ______________ may require a signature or other form of authorization from a designated company representative.

The correct answer is D. Charge account. Charge accounts (D) are credit-based purchasing arrangements between a company and a vendor where goods or services are billed and paid later - because they create a financial obligation on behalf of the company, they typically require authorization from a designated…

Question

Options

ACompany account
BAuthorized account
CMerchandise for cash account
DCharge account

How the community answered

(23 responses)

A
4% (1)
B
4% (1)
C
13% (3)
D
78% (18)

Explanation

Charge accounts (D) are credit-based purchasing arrangements between a company and a vendor where goods or services are billed and paid later - because they create a financial obligation on behalf of the company, they typically require authorization from a designated representative to prevent unauthorized spending. Company account (A) is too vague and not a standard financial term used to describe this specific purchasing mechanism. Authorized account (B) is similarly non-specific and not a recognized account type in standard business or accounting terminology. Merchandise for cash account (C) involves immediate payment, so no signature authorization is needed - the transaction settles on the spot with no deferred liability.

Memory tip: Think "charge = obligation" - whenever a purchase is charged to a company, someone with authority must sign off to acknowledge that liability, just like signing a credit card receipt.

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