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u are expected to answer five questions for a total of 20 marks. Question 4 The activity below relates to the business of Kok
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Answer #1

There are different types transaction cycles like revenue, expenditure, payroll and financial.

Revenue transaction cycle is related to sales and other income, their billings and collections.

Expenditure transaction cycle is related to purchases and other expenses and their payments.

Payroll Transaction cycle is related to the calculation of the gross pay, withholding taxes and other unpaid leaves or any other deductions and payment of net pay.

Financial Transaction cycle is related to the financing activities like issuing debt instrument, shares, payment of interest and dividend. Any activity related to the shareholders and debtholders falls under financinal transaction cycle.

Hence the activity of issuing financial reports to its shareholders and bondholders falls under Financial Transaction Cycle.

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